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EXPROPRIATION OF ABITIBIBOWATER INC.

INVESTMENTS
IN CANADA

PRESS CLIPPINGS OF INTEREST

JANUARY

13, 2008

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Will Danny's resource power grab pay off?


Premier seizes AbitibiBowater's hydro assets and cutting rights after company plans mill
closure, a move that may sour business investment in the province
The Globe and Mail
December 17, 2008
Konrad Yakabuski
Just when you thought the Danny Chavez gibes were getting tired, the Rock's irrepressible
strongman strikes - no, more like bludgeons - once again.
Danny Williams's move to unilaterally seize the Newfoundland hydro assets and timber cutting
rights of paper giant AbitibiBowater Inc. after the company announced it would close its
adjacent newsprint mill is the kind of self-inflicted wound that will sour any sensible business
person with an eye on investing in the province. If the government rips up duly negotiated
agreements just when it feels like it, what's the point in signing them in the first place?
At least Hugo Chavez, Venezuela's nationalization-happy President, has the decency to call
himself a socialist. Mr. Williams just acts like one.
Yet, every small-town Canadian who has experienced first-hand the roughshod tactics ofthe
multinationals entrusted over the decades to "develop" this country's resources will deep down
be just a little bit grateful for Danny Boy's penchant to go rogue.
"How will this be viewed by Newfoundlanders? Positive," said Scott Simms, the Liberal MP for
Grand Falls-Windsor, where Mr. Williams is expropriating Abitibi's assets. "How will it be
viewed by the outside world? I bet some people will say: 'Hey, there's someone who actually
believes resources belong to the people.' "
Generous incentives given to businesses, sometimes more than a century ago, were the basis of
Canada's economic development. Over the decades, governments gave (mostly) foreign
companies the right to raze forests, harness rivers and drill for oil in exchange for jobs and
investment.
"It was a totally rational policy," explained Joe Martin, director of business history at the
University of Toronto's Rotman School of Management. "Canada leaped ahead because we did
not have the capital to do it on our own."
So, what happens when one party to the deal decides it's no longer in its interest to maintain the
mill jobs? Should it get to keep all the other goodies granted by past governments and be able to
auction them to the highest bidder?
We know what Mr. Williams's answer is. No other government in Canada has been as bold, or
reckless, as Newfoundland's nominally Progressive Conservative Premier. Even Quebec, which
nationalized its vast hydroelectricity industry in 1962, spared the hydro assets owned by Abitibi
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and aluminum giant Alcan. The companies' decades-old generating stations have been the source
of fantastically cheap power to feed their mills and spawned a lucrative side business selling
surplus electricity back to the provinces - usually at a hefty premium.
Alcan has an even more profitable arrangement in British Columbia. Its five-decade-old smelter
in Kitimat is on its last legs, but its nearby Kemano hydro station sells huge surpluses at a big
markup to government-owned BC Hydro. Last week, Alcan's debt-strapped new owner, Britishbased Rio Tinto PLC, postponed a long-promised investment in a new Kitimat smelter. Even if it
is eventually built, it will employ 500 fewer workers than the current facility. Yet Alcan will
continue to enjoy full ownership of and profits from the hydro stations, which employ only a
handful of people.
B.C. Premier Gordon Campbell is evidently no Danny Williams.
But after staring down Big Oil over the Hebron offshore development and bodychecking Stephen
"Steve" Harper over a perceived slight on equalization payments that he no longer needs, Mr.
Williams had to erect a new bogeyman he could stand up to. Enter Abitibi.
The history of the Grand Falls-Windsor mill that Abitibi will shutter in March could be a
template for that of almost any other in Canada. It was built early last century by Britain's
Harmsworth family to feed its London Daily Mail with newsprint.
A 1905 Charter Lease from Newfoundland, then still a British colony, granted the Harmsworth's
Anglo-Newfoundland Development Co. Ltd. the right to "have, use and enjoy" timber and water
rights to produce hydro power. In exchange, the company built the entire town, splurging on an
avant-garde design inspired by the Garden City Movement of the era.
Ownership of the Grand Falls mill and the hydro assets eventually fell to AbitibiBowater, whose
creation in 2007 is itself the culmination of so many mergers that anyone who has worked in the
Eastern Canadian forest industry has probably worked for it or one of the companies it
swallowed. But many of those mergers were a sign of the forest industry's distress and not a vote
of confidence in its future.
The Grand Falls mill could not survive without either massive government subsidies or major
concessions from its unions. It is true Abitibi has been so stingy with new capital that the mill
might have been doomed by its obsolescence. But the hydro assets are still valuable. Abitibi had
been counting on them to ease its own financial difficulties.

Mr. Williams has decided otherwise. The expropriation bill tabled yesterday- with its 37-wordlong title - is chilling in its language. Those 1905 rights are simply "revoked." The bill says there
will be compensation for Abitibi. It's just that Mr. Williams's government will decide itself how
much.
Here's one thing Danny Chavez should keep in mind as he gets out the calculator: The fishery
may have provided better folklore, but the forest industry provided a fair share of
Newfoundland's wealth over the decades. Grand Falls, and chapters of the province's history,
wouldn't exist without it. What's that worth?
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Will expropriation backfire?


Advertiser (Grand Falls-Windsor, NL)
December 18, 2008
David Newell
The public relations machine that is the Danny Williams government rolled into - and out ofGrand Falls-Windsor yesterday.
He stopped by to collect the accolades of fellow politicians, union leaders and small business
people after stripping timber and water rights out from underneath AbitibiBowater.
The expropriation of those rights, at first glance, is a great thing for this province. Those natural
resources belong to the people of central Newfoundland and these are the peopl who should
benefit from their development with employment and a healthy and successful economy.
Because of this bold move- a term, by the way, which seems to follow the AbitibiBowater fiasco
- Premier Williams is being lauded as a hero. Members ofthe House of Assembly were
reportedly lining up to autograph the legislation, since they wanted to be remembered as
supporting the law.
One hopes the expropriation actually benefits central Newfoundland, though. It seems that the
provincial government have been a step behind in the AbitibiBowater situation from the
beginning. Perhaps they have been making good use of their time, but it has seldom appeared so.
Might things have turned out differently if they had facilitated talks between the company and
unions? Did the government suggest to the unions that they consider job cuts in order to save the
industry in this region? Was there any thought given to the fact that the federal government may
be considering assistance for the forest industry and that might have helped the Grand Falls mill?
The Williams government watched from the sidelines as AbitibiBowater followed through on the
only option they felt they had if the facility in Grand Falls-Windsor remained status quo.
On Dec. 4, Premier Williams did not pass comment on the closure announcement, but deferred
questions to his deputy and Minister ofNatural Resources, Kathy Dunderdale. Apparently, the
demise of a century-old industry in the central region of the island was not important enough for
him to talk about.
Yesterday he was available, though.
It seems sentiment on the expropriation is polarized - people hate AbitibiBowater and love the
government. In the area in-between there is a huge amount of space, most of it filled with people
watching from afar. Some of those people are potential investors in industries we need here. Will
they look at the government's move to "take ball their ball and go home" as one that encourages
them to put their money in this province?

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Yes, we have to look out for our own and that includes generations ofNewfoundlanders and
Labradorians to come.
In order to do that, the province must be attractive to investors. Let's hope the legislation passed
this week doesn't scare big business away. Goodness knows we need it.

High-risk delusions in Newfoundland


National Post- Sat, Dec 20- Financial section editorial
Terence Corcoran
In a letter yesterday to Newfoundland Premier Danny Williams, the CEO of AbitibiBowater,
David Paterson, said Mr. Williams' plan to expropriate the company's assets in the province is
"without precedent in Canada, and is reminiscent of decrees emanating from jurisdictions with
less democratic traditions." He said it "shocks common sensibility."
True enough, but Mr. Paterson is being too polite. This is Danny Williams we're talking about,
the Premier of Newfoundland and Labrador, a man now routinely referred to as a North
American version of South American semi-despot Hugo Chavez. Hugo Williams and Danny
Chavez have almost become official nick-names. What else is there left to say? We're out of
political epithets.
As it stands today, the nationalizing, expropriating, demagogic Mr. Williams doesn't appear to
think Venezuela is an inappropriate model for a Canadian province. He even writes his own selfincriminating hatchet jobs, sending out speeches, news releases and legislation that leave no
doubt that Mr. Williams marches to a Third-World drummer who has little respect for the
traditional rights and principles of a constitutional democracy.
And so it was when Mr. Williams brought in legislation on Tuesday to expropriate perhaps more
than $lOO-million worth of local assets owned by international paper giant Abitibi-Bowater Inc.
In a manipulative and disingenuous speech in
the Newfoundland House of Assembly, Mr. Williams said the expropriating legislation-- taking
over the company's timber and water rights and its electricity-generating facilities without
compensation -- "is very simply about trees and water -- the most basic of all natural resources."
Well, no, it isn't. While water and trees are on the surface of the expropriation move, the seizure
of AbitibiBowater's assets is about plug-headed, delusional unions and manipulative provincial
leadership. It is also, more deeply, about the risks Mr. Williams is taking with the Newfoundland
economy, which is already on a Chavezian collision course with deficits and disaster.
The hope for Newfoundlanders and Labradorians must be that Mr. Williams will come to a more
reasonable accommodation with economic reality, of which AbitibiBowater is but one part. Two
years from now, with the price of oil being what it is, Mr. Williams may not have the cash on
hand for the whopping compensation settlement he will need to pay to get Newfoundland out of
the NAFTA mess he has created. As Mr. Paterson emphatically puts it, these actions are "clearly
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and unequivocally illegal."


A good entry point into the complex AbitibiBowater affair is through the mind of the delusional
union leadership that for more than two years has been resisting restructuring plans at Abitibi's
Grand Falls-Windsor newsprint mill. After the latest failure to negotiate a new labour agreement,
the company announced two weeks ago that the Grand Falls mill would be closed on March 28,
putting more than 700 people out of work.
As part of a company-wide restructuring, Abitibi also announced planned shut downs in
Tennessee and Alabama. In Newfoundland, the company planned to close the mill permanently
and then gradually exit the province. That exit would include selling parts of its water and timber
rights, along with its power facilities.
The union, under the leadership of George Macdonald, president of the Communications, Energy
and Paperworkers (CEP) union local, seems to think the whole episide is part of a negotiating
gambit on the part of the company. He thinks the company, now the target of expropriation, will
be willing to get talks going again.

Mr. Macdonald's version of events, as he described them on CBC Radio yesterday (see below),
is that the mill at Grand Falls is profitable, but that the company simply wants to become an
electric power company because it requires fewer people. He also seems to see the strategy as
part of a blackmail effort. "No paper, no power," implying that the union and the government are
confiscating Abitibi's power and water resources to force them to keep the mill open.
Mr. Paterson, in an interview yesterday, said the time for negotiating is long past. The company
has made a final decision to withdraw from Newfoundland. "We're a paper company, not a
power company." It has already signed an agreement to sell its minority interest in one of the
power plants to an Italian power company, ENEL, which owns majority interest. The price is
about $20-million. ENEL's assets also appear to have been expropriated.
The union and the government appear to have misjudged the company's intentions, or they are
playing hard ball to force the company do what it does not want to do.
It's a dangerous game for Mr. Williams. Newfoundland isn't exactly a fiscal powerhouse. Its
latest financial update shows that if the price of oil is at $60 a barrel, the province "could be
facing a deficit of several hundred million dollars next year, and could potentially be facing
deficits in the years to come."
At the same time, the province is paying lavish wage increases to unionized civil servants of
20% over four years. This is a formula for fiscal disaster down the road. And if the province also
has to pay out big dollars to settle a NAFTA case, along with suffering a hit to its reputation as
the Venezuela of the North, the outlook is even bleaker.

Mr. Paterson said yesterday he is hopeful Mr. Williams will get back to negotiating over the
company's assets, rather than seize them. Might be a good idea.- For a copy ofDavid Paterson's
letter to Danny Williams, visit financialpost.com/fpcomment.
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AbitibiBowater fires back at Newfoundland Premier Letter argues province violated trade law

National Post- Sat, Dec 20


Paul Vieira
AbitibiBowater Inc. says the Newfoundland and Labrador government, led by Premier Danny
Williams, violated international trade law by expropriating the company's timber, water and
hydroelectric assets, and it is "determined" to pursue its rights through the courts.
"Failing an agreed resolution or full and timely compensation, AbitibiBowater is determined to
pursue its rights against the government of Newfoundland and Labrador to the fullest extent
available in connection with the serious and unlawful infringement of its rights," David Paterson,
the newsprint maker's chief executive, said in a scathing letter sent yesterday to Mr. Williams.
"These confiscatory and hostile actions do no good for the people of Newfoundland and
Labrador, their communities, their province or the country as a whole."
Ironically, should the Mont-real company follow through on its legal threat, it would be up to the
federal Conservative government to defend the province against allegations that NAFT A rules
were violated. Mr. Williams and Stephen Harper, the Prime Minister, have had a tumultuous
relationship, although things appear to be improving between St. John's and Ottawa.

Mr. Williams, who has a history of confrontational approaches with companies, moved to revoke
Abitibi-Bowater's natural resource rights and put its power plants under the control of the
province. The move was in response to AbitibiBowater's decision to shut down its pulp-andpaper mill in Grand Falls-Windsor, effective March 28.
"This is a very hard-hitting letter and there is much here to be taken seriously," said Lawrence
Herman, an international trade lawyer at Cassels Brock and Blackwell, who said earlier this
week that it was "virtually certain" that the dispute would result in a NAFTA claim.
"Obviously, the company is not going to take this without a long and aggressive fight, judging
from the tone ofthe letter."

Mr. Paterson informed the Newfoundland Premier that the company had retained "prominent"
lawyers, among them experts in constitutional and trade law, to defend its interests. "We have
been advised that these actions clearly and unequivocally are illegal."
Chapter 11 under NAFTA allows companies to invoke binding arbitration against countries that
violate investors' rights. It provides for direct actions against governments, with enforceable
awards and no right of appeal. Moreover, Mr. Herman said, the provision gives numerous
advantages to an aggrieved investor.
In the letter, Mr. Paterson said that the company's rights were violated, and that it is eligible for
compensation, equivalent to the fair market value of the assets expropriated. Further, it is alleged
Mr. Williams' actions, as outlined in a bill passed by the provincial legislature, discriminate
against the company -- prohibited under rules governing NAFTA.
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Meanwhile, in an unrelated development, AbitibiBowater said it was looking to refinance a


US$347-million term loan next month before the debt comes due in March.
The company is trying to sell assets to raise cash amid looming debt maturities and declining
North American newsprint demand. The company, which has US$6.2-billion in total debt, is
"considering

Williams's tough talk could damage province


Ottawa Citizen (Canada)
December 20, 2008
Peter Hadekel
MONTREAL- Newfoundland and Labrador's move to strip Montreal-based AbitibiBowater Inc.
of rights and assets in the province didn't come out of the blue.
Sabre-rattling against corporate and political interests in the rest of Canada is a sport played with
relish by a long line ofNewfoundland politicians.
The province tried to tear up the bad deal Joey Smallwood negotiated in the mid-1960s with
Hydro-Quebec over the Churchill Falls power project. That case went all the way to the Supreme
Court before Newfoundland lost its bid to take back the electricity it had signed over to Quebec
at rock bottom prices until 2041.
Then came the public squabble between former premier Brian Tobin and the mining company
seeking to develop the giant Voisey's Bay property in Labrador. Tobin wanted commitments that
the minerals extracted there would be refined in Newfoundland and Labrador.
Current Premier Danny Williams has fought with the oil industry and with the Harper
government over the benefits that flow to Newfoundland and Labrador from development of its
offshore oil and gas deposits.
All this because, as Williams once put it: "Our history has been marked by the development and
harvesting of some of our most precious resources for the benefit of others.'
Now, here comes Williams with the latest act of political bravado: Legislation that strips
newsprint giant AbitibiBowater of its timber and water rights and of its interest in hydro facilities
in the province.
The company's sin? Announcing it will close its Grand Falls mill in March, putting more than
700 people out ofwork, as part of a plan to cut production and costs.
Williams said only some unspecified payment might be made for the power facilities.
AbitibiBowater was "surprised" by the unilateral action. It had recommended that a joint group
be set up to address the closing and to 'discuss the the disposal of our assets and rights in an
orderly manner.'
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In his province, the political cost to Williams may be minimal. Newfoundlanders like his tough
talk, and when he does this kind of thing, his approval ratings usually soar.
But the economic bill could be substantial ifNewfoundland is viewed as nationalizing a
company's business assets.
While the province may be within its constitutional rights to reclaim publicly owned natural
resources, its actions could trigger a challenge under the North American Free Trade Agreement,
experts say.
AbitibiBowater, although headquartered in Montreal, is incorporated in the U.S. and could take
full advantage ofNAFTA's Chapter 11 to sue Canada.
Jan Jorgensen, associate professor at McGill University's Desautels Faculty of Management,
noted that the NAFTA clause guarantees fair compensation for actions that amount to
nationalization.
A ruling in the company's favour could have "interesting" implications for future business
investment in Newfoundland, he said.
Some will cheer Williams for putting the boots to a company that had access to cheap power and
timber for decades before pulling up stakes.
But other parties bear some of the blame. The union at the high-cost Grand Falls mill twice voted
down company requests for wage concessions.
And the Newfoundland government could have avoided a damaging public confrontation by
negotiating terms of the company's exit.
Instead, the firebrand premier will be painted as an anti-business leader with little awareness of
the economic crisis unfolding around him.
Right now, every government is looking to create jobs and investment. This is hardly the time to
be sending signals that scare away capital.
Williams has developed a reputation. He's already been labeled as a northern version ofHugo
Chavez, the socialist and nationalist who runs Venezuela.
The comparison may be over the top, but Williams has raised eyebrows with his tireless and
tiresome campaign to defeat the Harper government.
And he's shown little understanding of the crisis in which the forest products industry now finds
itself.
Consumption of newsprint is declining at about 12 per cent as year as publishers lose ads to the
Internet. Companies across North America are cutting back.
Soon, the premier will have an empty mill on his hands. But what company would want to do
business with Danny Williams? all options," Mr. Paterson told Bloomberg News.

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Williams versus Big Paper: Why Ottawa is wary


The Chronicle-Herald
December 22, 2008
Dan Leger
IF THAT ROAR from the northeast sounds familiar, don't be surprised. It's just the latest
eruption of Newfoundland and Labrador's volcanic premier over another attempt by outsiders to
loot his province's resources.
On the surface, ifs a one-on-one scrap between the government and a big paper company. But it
threatens to drag in the federal government and create yet another political crisis between the two
capitals.
This time, Danny Williarns has trained his guns on AbitibiBowater. The company plans to close
its ancient newsprint mill in Grand Falls next March, citing high production costs, overcapacity
at a time of falling demand and a worldwide slump in the paper industry.
The shutdown announcement follows more than three years of jousting between AbitibiBowater
and the Williarns administration.
It started when the company cut production in 2005, sparking a warning from the premier that
closing the mill would have dire consequences, including loss of timber rights.
The company went ahead anyway; now it will be up to the courts and possibly a NAFTA panel
to sort it out. And thafs where the feds come in, just at a time when trade issues look to be
delicate with a protectionist new Congress and administration arriving in Washington.
Grand Falls' story is familiar. It's an isolated mill town far from everything and with few other
economic options. The mill itself is a museum piece and transportation costs are crippling.
The mill has a longstanding workforce, which twice refused the company's requests for
concessions to keep it open. I can't help but wonder whether Williarns' threats and bluster made
the workers think they'd be protected if they rebuffed the company's demands.
In any case, the company made its decision and Williams wasted no time ramming a bill through
the legislature stripping AbitibiBowater's timber rights on Crown lands, its water rights and
expropriating three small hydro-electric plants.
The company says it was shocked at the government's actions. But that's hard to understand since
Williarns has been threatening expropriation since the summer of 2005 when the company shut
one of the plant's paper machines.
Surprised or not, AbitibiBowater has little choice but to fight the seizure or it will look like a
pushover wherever it operates in Canada, the U.S. and Britain. It also wants to develop hydroelectric potential in central Newfoundland, but hot places will freeze over before Williarns will
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stand for that.


The company will certainly go to court, but it also has the option to challenge the expropriation
under the NAFTA treaty provisions protecting corporate interests from unreasonable
expropriation.
If that happens, look for a renewed war of words between once-and-future enemies Williams and
Prime Minister Stephen Harper.
The province can defend itself perfectly well in the Canadian courts. But there's no way the
NAFTA process can be invoked by AbitibiBowater without Ottawa getting dragged into it.
Treaties are signed by sovereign states, not provinces.
The Harper government doesn't want to get involved and, really, it can't win. If it sides with the
company, Williams will accuse Harper of acting against Newfoundland's interests and favouring
foreign investors. Another hot war of words will no doubt follow.
Yet AbitibiBowater is officially an American company, and seizing the assets of its shareholders
will clash mightily with Harper's free-trade, pro-corporate worldview.
The prime minister certainly doesn't owe Williams anything after the premier's vitriolic and
personal attacks on him over the Atlantic accord. Harper won't forget that Williams campaigned
against Conservative candidates last October and defeated them all.
Williams won't back down. But he should be careful.
The forestry, mining and petroleum interests powering the Newfoundland economy must be
watching the AbititiBowater situation with great apprehension. Expropriation of resource rights
and corporate property, even with compensation, is a good way to kill new investment.
Williams is a Newfoundland hero for standing up to big money. But his actions must be
provoking angst in Ottawa and in mill towns across Canada.
You have to wonder whether people in other besieged communities in Ontario, Quebec and even
Nova Scotia will demand the same from their leaders, none of whom seems to have the fire or
resolution of the bombastic King of the Rock.

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Williams's Abitibi bill could raise NAFTA questions


Ottawa could be on the hook for 'significant' money company says it will seek for loss of its
assets
OLIVER MOORE
Globe and Mail - December 27
Premier Danny Williams has taken on prime ministers and oil executives. He's bulldozed his way
through each conflict, helping bolster his staggering popularity in Newfoundland and Labrador.
But his latest gambit - rushing through legislation to seize many of AbitibiBowater's assets in the
province after the paper giant announced its mill would close - promises to have effects that
reverberate far beyond Newfoundland.
A spokesman for AbitibiBowater said the company would be seeking "a very, very significant
sum of money" for its assets, money for which Ottawa could be responsible as signatory to the
North American free-trade agreement.
And observers say the case may raise the constitutional question of whether Ottawa can sign
treaties binding provinces without their consent.
None of that seems to matter locally. Public opinion in the province has rallied behind Mr.
Williams. Callers to a talk-radio show were near-unanimous in favour after his government
introduced the legislation expropriating the company's resource rights and hydroelectric
facilities.
"It was the lift-up this province needed at the moment," said Brian Madore, assistant news
director at VOCM in St. John's. "It was, 'Take that, Abitibi.' "

The company isn't backing down in the face of public opinion, though, and is claiming breaches
ofNAFTA's Chapter 11 provisions on expropriation and compensation, minimum standard of
treatment and non-discrimination.
If the dispute cannot be resolved within six months, the company can bring its argument before a
NAFTA panel to determine its legal rights.
Compensation is clearly an important issue for AbitibiBowater, which acknowledges that it is
going through hard times. Company officials say they would like to arrive at a satisfactory figure
through negotiation, but warn they will "do everything necessary" to protect their shareholders.
"They're not going to settle the compensation in six months, I just don't think that could be
done," predicted Lawrence Hennan, international-trade counsel at Cassels Brock & Blackwell
LLP.

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The province's position is that AbitibiBowater's resource rights were contingent on the company
keeping the mill open. Only their physical assets warrant compensation, according to the
legislation, which also gives cabinet authority to set the amount.
The company has challenged the validity of that approach.

Mr. Williams's belief he can determine the level of compensation "is completely illegal," said
Seth Kursman, vice-president of communications and government relations for AbitibiBowater.
"NAFTA is unequivocally clear on that, they must provide us with fair market value."
And in a recent letter signed by CEO David Paterson, the company makes clear that it believes
the NAFTA breaches include the loss of its resource rights.
"Investment is very broadly defined in Chapter 11 and it would include a licence," noted Michael
Robinson, ofFasken Martineau.
"If you have a licence to cut timber, that has a value," he added. "Whatever licence they have is
an investment with value, and fair market value has to be paid if you take it away."
Chapter 11 ofNAFTA takes a broad view of fair market value, stipulating it must include "going
concern value, asset value including declared tax value of tangible property, and other criteria, as
appropriate." Compensation also must be paid "without delay" and must include interest from the
date of expropriation.
A nonbinding agreement that AbitibiBowater announced this week to sell hydro assets in Ontario
offers a possible hint at the value of what was seized in Newfoundland. Under that deal, the
company will receive $197 .5-million, before expenses, and the buyer will also assume $250million in term debt held by a company 75-per-cent owned by Abitibi.
'

The assets in Ontario had a combined capacity of about 137 megawatts. The company's hydro
assets in central Newfoundland had a combined capacity of about 116 megawatts.

Mr. Kursman wouldn't speculate on the overall compensation figure Abitibi will seek.
If the dispute goes to a NAFTA panel and is decided in favour ofthe company, penalties will be
assigned to Ottawa. With relations between St. John's and Ottawa so sour, and Newfoundland
not having ratified the treaty, some are wondering if it will refuse to pay back the money.
The validity of that position is raising debate. Under the 1933 Labour Conventions decision by
the British Privy Council, then the highest court in the land, provinces have to agree to
international treaties that affect their exclusive jurisdiction.
"This could result in a very important test of the constitutional competence of the Parliament of
Canada to ratify international treaties," Mr. Herman said.

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"If that authority was overturned, it would affect Canada in a major way. Because it would mean
that the federal government would basically lose the authority to enter into free-trade agreements
with other countries."
But Mr. Herman said that attempts by the province to claim it is not bound by NAFTA would be
unlikely to fly.
"The stronger view, by far, is that in matters of national importance and in matters of trade and
commerce, the federal government has the power both to sign and enforce international
agreements."
That opinion was backed by Jacob Ziegel, a professor in the faculty oflaw at the University of
Toronto. He said the 1933 case "really doesn't have much bearing" on this situation: "In my
view, the federal government should have more than adequate jurisdiction in international
agreements."
But Mr. Robinson is not so sure and called the constitutional issue a "sleeping giant."
He advised Canada on the 1989 free-trade agreement and remembers then-Ontario premier
David Peterson commissioning legal opinions saying it was unconstitutional for Ottawa to
purport to bind the provinces.
Various provinces, including Ontario, ultimately cut deals involving "adjustment payments"
from the federal government, he said. And when NAFTA was being brought in, Ottawa gave the
provinces the right to exclude their laws that didn't comply with it.
They all did, but none of the provinces formally agreed to be bound by this treaty either.
"The constitutional case never arose," Mr. Robinson said. "Many academics and others have
been waiting for it to come up again. We predicted that Chapter 11 would do that. A province
would breach NAFTA and argue that it isn't bound by it, among other defences. So this
Newfoundland expropriation is that case."
Does he predict a constitutional dust-up? Probably not. He thinks the Supreme Court wouldn't
uphold the Labour Conventions decision, but also thinks this dispute won't make it there.

"I am betting that we will do it again the 'Canadian way' and cut deals, despite the truculence of
Danny," he said.

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Stop it, Danny- By Michael Walker- National Post Editor- January 5


By revoking Abitibi-Price's timber and water rights, Danny Williams is sacrificing his
province's future
I arrived back in Newfoundland on New Year's Eve. I knew immediately that the normal
jauntiness of my fellow Newfoundlanders was kicked up a notch. Why, I asked? Was I, a CF A
(Come From Away) or something? Didn't I know that the Rock was a have province now? And
even a little more in the have since Danny - everyone calls him that - had stuffed the water
rights contract and timber rights agreement up the nose of Abitibi-Price for shutting down the
hundred-year-old pulp mill in Grand Falls.
"We are sick and tired of the CF As taking advantage of us and our Danny is just the boy to set
them straight," the taxi driver confided in me as a fellow sufferer. This exploitation motif
explains the popularity of Premier William's legislation to seize the timber and water rights that
stem from the original 1905 agreement between the then-colonial government and the Anglo
Newfoundland Development Company, which built the original mill and infrastructure. And
there is no question but that Newfoundlanders have been exploited.
In a brilliant paper some 20 years ago, Newfoundland historian Peter Neary documented how
Newfoundlanders have been ill-served by their governments. In fact, due to the rapacious
conduct of its governments during the pre-Confederation period, Newfoundland had been
bankrupt. Not once, not twice, but three times its politicians had managed to contrive a system of
corruption and patronage which would have brought tears of envy to the eyes of the most
acquisitive of tin pot dictators. And, government going broke didn't end with Confederation, as
Premier Joey Smallwood led the province into penury at the head of a parade of the most
shameful sort of policies concocted by himself and his federal government enablers.
With that as background, let us ask whose interest Mr. Williams is really serving. He is tearing
up a contract that gave a property right in Newfoundland timber and water to the company. It is a
contract of the kind about which Mr. Williams has some knowledge. He made his fortune in
cable television, where the license to provide the service is a monopoly conveyed by the
Canadian government to those with the political connections and other attributes to get it.
Under the terms of the monopoly that Mr. Williams eventually abandoned- in return,
reportedly, for a couple hundred million dollars- Newfoundlanders in his area were compelled
by force of federal law to use no other television delivery system than the one that Mr. Williams
provided. Satellite dishes which brought "illegal" television signals to their owners also brought
the RCMP to seize the illegal dishes and charge the owners. Now, presumably Mr. Williams
would claim that he owned the license to exploit Newfoundlanders in this way and he had every
right to sell it. In fact, he would probably agree that if there had not been a system of laws
ensuring him of his right to sell the right to exploit he would not have invested the money in the
monopoly in the first place. "To attract capital investment in such activities, governments have to
create the rule of law to make the environment attractive for the investors," he would have had to
agree.

Page 14 of18

000015

That was then. Then Mr. Williams was himself a filthy capitalist crony of the federal government
exploiting Newfoundland television watchers. Now he is taking advantage of a different attribute
of his subjects- their susceptibility to the myth, historical evidence to the contrary, that their
governments are there to help them and protect them against the exploiters. They see him as a
saviour only because they don't know what Premier Danny knows quite well- that while it
tightens his grip on power, this act of his government could poison the well of future investment.
Would Danny Williams have invested his own money in a jurisdiction that did not respect
property rights conveyed by a past government? One which said, well you have invested your
money to provide the television cable system to people but if you personally don't want to be in
cable vision any more then we are going to "fight tooth and nail in the courts" to take the right
from you and sell it to the highest bidder. After all, why should Newfoundlanders allow their
watching of television to be bought and sold like that? It is their television watching time after
all.
Just like it is their water and their timber rights which, Mr. Williams now says, well, urn ... er ...
that he will "fight tooth and nail in the courts" to take away from Abitibi-Price.
Premier Williams, for the sake of the people ofNewfoundland for whom you have a deep
affection, stop willfully destroying the province's property rights reputation. The Survey of
Mining Companies, which assesses the global environment for mining investment (published by
the Fraser Institute) shows that British Columbia is still paying reputationally for its
government's seizure of mining industry assets nearly 20 years ago. You know better than to
follow this course and create this sort of legacy for the province - and for yourself.

National Post- Wed Jan 7


J. Michael Robinson
The expropriation by Newfoundland and Labrador of rights and assets of AbitibiBowater has
revived debate on the oft-criticized Chapter 11 ofNAFTA. Some misunderstandings have
appeared and a "sleeping giant" constitutional issue seems to have been overlooked.
First, let's review Ch. 11 and its place in the world of investment promotion and protection
agreements. In the 1960s, to stimulate foreign investment, chiefly in developing countries, the
United States pioneered such agreements, commonly called BITs (bilateral investment treaties).
In 1966, the World Bank created a facility for resolving disputes under them: the International
Centre for the Settlement oflnvestment Disputes (ICSID). The convention establishing ICSID
currently has 143 country members (Canada has a constitutional problem that still prevents it
from joining; more on that later).
There are currently approximately 2,400 BITs worldwide. Canada has 23 of them and is seeking
more, with China and India for example.
Most disputes claiming mistreatment of a foreign investor protected by a BIT are dealt with in
binding international arbitration at ICSID: 151 cases since 1966 with 124 pending. So clearly Ch.
Page 15 of18

000016

11 is neither novel nor unusual. Hundreds of countries offer protections to foreign investors and
are sued when they breach them.
Neither NAFTA nor these 2,400 BITs forbids expropriation, contrary to popular
misunderstanding; rather, they condition it. Expropriation must be for;:~. public purpose, done
with due process, without discrimination and accompanied by prompt payment of fair market
value compensation.
Who responds to a claim of illegal expropriation by a province? Only Canada. NAFTA neither
holds the province liable nor creates any method for Canada to recoup damages awarded by the
arbitral tribunal. That's Canada's problem.
Does the provincial expropriation bill (made into law --an Act-- in one day) violate Ch. 11? This
observer says it clearly does.
Consider due process. Our parliamentary traditions require that a bill be studied in committee,
allowing input from the House members, press and public.
What about compensation? This act says that the government (read Premier Danny Williams)
will determine compensation in its discretion. The act also says "... a person is not entitled to
compensation from the Crown [Newfoundland and Labrador government] or a minister,
employee or agent of the Crown arising from, resulting from or incidental to the operation of this
Act" (s. 10 (1)).
But international treaties override domestic laws so NAFTA trumps the act. Ch. 11 also contains
general obligations to give investors from the three NAFTA countries "national" and "fair and
equitable" treatment under international law, and it is solely international law which applies to
NAFTA.
Does the Canadian charter of Rights and Freedoms say anything about this? The Charter protects
personal rights only and does nothing for property or corporate rights.
So does the above analysis mean that foreign investors have better protection from unfair or
arbitrary parliaments and legislatures than Canadians? Yes, they do.
Recall, for example, the affair of Toronto's Pearson airport terminal one. Then-prime minister
Jean Chretien tore up the signed contract with a private group to build and operate it in a
public/private partnership, claiming former Prime Minister Brian Mulroney had awarded it to
Tory cronies. The bill of cancellation gave the private investors only their actual out-of-pocket
costs, minus any for "consulting" (read lobbying).
However, Mr. Chretien seemed to have forgotten, or chose to ignore, that there was a large U. S.
investor in the group. The bill was legal respecting Canadians -- because Parliament is supreme,
save for the Charter (see above) -- but it was clearly illegal under NAFTA Ch. 11. The bill was
withdrawn and a complex buy-out of the private investors in terminal three (most also being
those in terminal one) was finally substituted.
Page 16 of18

000017

Let's hope this current mess gets sorted during the six-month cooling off and negotiation period
before a Ch. 11 claim can be filed. Negotiations should be three-way to succeed, involving the
investor and the two governments.
There is a constitutional position Mr. Williams could take. To paraphrase: "You Feds signed
NAFTA and the law of Canada says provinces aren't bound by international agreements affecting
their exclusive Constitutional rights, unless they accept them too." The case is Labour
Conventions decided by the English Privy Council, then Canada's final appeal court, in the 1930s
and legislating "property and civil rights within the province" is clearly an exclusive provincial
power. Canada's Supreme Court has never reversed that decision.
So Mr. Williams could say: "Canada, defend my expropriation for me and pay the damages if
(when) you lose." That stance is unlikely to assist our often-fraught federal-provincial relations,
particularly with that province.
One hopes for a traditional Canadian solution: The three parties cut a deal so everybody "wins,"
or at least saves face and stays out of the constitutional court and a binding international arbitral
tribunal.
I am not alone in fearing that Canada could join Venezuela, Bolivia, Argentina and other
countries which attract foreign investors with international investor protection agreements but
ignore them when it suits their needs, hurts and wants. That stain on our international reputation
and ability to attract much-needed foreign investment must somehow be finessed. Carry on
Canada (and Danny Williams)!- J. Michael Robinson is Counsel, Fasken Martineau Dumoulin
LLP, and Adjunct Faculty, University of Western Ontario Faculty of Law.

Page 17 of18

000018

Pages 19 to I

a 20

are withheld pursuant to section


sont retenues en vertu de l'article

21(1)(c)

of the Access to Information Act


de la Acces

a l'information

ABITIBIBOWATER
BACKGROUND
AbitibiBowater, headquartered in Montreal and incorporated in Delaware. Abitibi Inc. and Bowater Inc.
merged in 2007 to become AbitibiBowater. lThe company owns or operates,?2 pulp and paper facilities and
27 wood products facilities located in the u.'s., Canada and South Kore~AbitibiBowater Press release
Feb.2010) It is also amongst the world's largest recyclers of newspapers and magazines and has third party
certification of all of its managed forest lands.
Similar to other forest industry companies, AbitibiBowater faced a number of challenges including the
cyclical nature of the forest products industry; collapsing demand for newsprint in North America, its
principal product; weak paper markets; capital-intensive nature of its operations; weakened global economy;
and cost pressures resulting from the volatility of currency exchange rates and costs for fibre and energy.
AbitibiBowater took steps to address theses issues by curtailing its production, such as permanent closures or
indefinite idling, divesting non-core assets and implementing cost reductions.
However, it was unable to address debt maturities and liquidity needs. Hence, AbitibiBowater and its
subsidiaries filed for court protection in the U.S. and in Canada under CCAA on April16, 2009. Today, the
company continues operations under bankruptcy protection.

Other issues:

Pension plans:fiiension plans are unfunded by~.3 billio1 To spare more than(i:"7,000 Canadian
retirees from losing kbout a quarter of their pensions, he union has proposed a plan to shift the money
backing retirees pensions to a separate trust fund. ccording to news sources, the Company has reached
[two tentative deals with uniocifone with Communications, Energy and Paperworkers Union of Canada
(CEP) (on March 7, 2010) affecting about 4,500 workers at 12 mills in Eastern Canada (and about 8,000
retirees), the other with the Quebec Fe'deration of Labour (March 13, 2010) which will affect about 1,000
workers at 4 mills in Quebec.

1\

41}-

Newfoundland and Labrador:


Feb.25, 2010: AbitibiBowater filed a Notice of Arbitration under NAFTA with regards to the
expropriation of its assets and rights by the government of Newfoundland and Labrador, on
February 25, 2010, claiming CDN$500 million in damages.
April 06, 2010: The province's environmental claims ($200 million) against insolvent
AbitibiBowater have been dismissed by a Quebec judge. The province was seeking, through
bankruptcy proceedings, to have the company pay for the clean-up of several of its former.

Government assistance received:


Credits for C$ 33.3 M from Pulp & Paper Green Transformation Program, managed by NRCan.
Sept 23: Bowater Mersey Paper Co Ltd. (subsidiary of AbitibiBowater) received Can$ 2.5 M from
the Nova Scotia Government through the Community Development Trust Fund.
May 09: The Courts approved a US$100 million loan guarantee from the Government of Quebec to
AbitibiBowater.

rL

000021

Annex
Operations: (Ref: Feb 25, 2010 Press release): AbitibiBowater owns or operates 22 pulp and paper mills in
the United States, Canada, and South Korea, and 27 wood products facilities located in Canada. Most
Canadian operations are in Quebec and Ontario.
Employees: (Ref: SEC filing: Form 10-K, for 2009, filed March 31, 2010) AbitibiBowaterhas 12,100
employees of whom about 8,800 were represented by bargaining units. In Canada unionized employees are
represented predominantly by the Communications, Energy and Paperworkers: CEPI'anada has over 8500
employees of which over 5400 are in Quebe~
Markets: 90 countries around the globe
Products:($): 48% Newsprint; 37% Coated and Specialty Papers; 9% Market Pulp; 6% Wood Products
Distribution of sales: (based on 2008 Annual Report)
Newsprint: 48% United States; 8% Canada; 3% Asia; 12% Europe; 17% Latin America; 2% Other countries
Coated and Specialty Papers: 83% United States; 11% Canada; 2% Asia; 2% Europe; 2% Latin America
Wood Products: 42% United States; 58% Canada
Market Pulp: 60% United States; 3% Canada; 6% Asia; 19% Europe; 12% Latin America

Financial figures:( Ref: SEC filing: Form 10-K, for 2009, filed March 31, 2010)
Overview of Financial data 2007-2009 (ending Dec 31 81)
(In millions, except per share amounts or otherwise indicated)

2009

%
change
efrom
2008

2008

2007

Observations:

Positive cash flow in 2009 in operating activites.


Decrease in total sales by 36% and employees by 24 % ( since 2008)
Large decrease in long-term debt and total debt (75% decrease from 2008).
Increase in total liabilities by 8% from 2008.
In general, average decrease by 113 in sales, which Abitibi states is due to poor shipment volumes and lower transaction
prices from industry and market downturn.
Biggest decrease in sales in core business of newsprint (44% decrease, near 2007levels).

Under the Creditor Protection Proceedings. For more information, see "Total Debt" p.111 of SEC filing, Form 10-K
AbibitiBowater, March 31st 2010.
2
Including pre-petition and post-petition liabilities.

000022

AbitibiBowater Company Profile


Apri/12, 2010
Note: bracketed numbers denote idle capacity.
Mill Name

Products

Capacity

Employees

Pulp&Paper
Newsprint
Lumber

715 000 t [288 000 t]


905 000 t
250MMjbm

1804 {353]

Ontario
lroquois Falls

Pulp & Paper


Newsprint

40 000 t
245 000 t

380

Active

Fort Frances

Pulp & Paper

331 000 t [73 000 t]

604 [?]

Active

Fort William

Pulp &Paper

[215 000 t]

[353]

Sold

Newsprint

410 000 t

350

Active

Pulp & Paper


Newsprint
Lumber

344 000 t
250 000 t
250MMfbm

470

Active

Pulp& Paper
Newsprint
Lumber

921 000 t [456 000 t]


1474 000 t
2221 MMjbm

3382 {648]

Alma

Pulp & Paper

351 OOOt

545

Active

Am os

Newsprint

207 000 t

227

Active

Baie-Comeau

Newsprint

577 000 t

860

Active

Pulp& Paper

[223 000 t]

[368]

Closed

Newsprint
Newsprint

218 000 t
125 000 t

-280
-120

Active
Active (closing 2010)

Chateau-Richer

Lumber

63MMfbm

75

Comtois

Lumber

140MMfbm

118

Dol beau

Pulp & Paper

[233 000 t]

[280]

Idle (since June 2009)

Gatineau

Newsprint

347 000 t

300

Active

Girardville

Lumber

90MMfbm

120

Kenogami

Pulp & Paper

206 000 t

440

La Dore

Lumber

170MMfbm

140

Larouche

Lumber

90

Pulp& Paper

364 000 t

Maniwaki

Lumber

125

Manseau

Lumber

20

Mistassini

Lumber

175

Mauricie

Lumber

130

Normandin

Lumber

85

Opitciwan

Lumber

30

Outardes

Lumber

175

Thoro Id
Thunder Bay

Quebec

<jl\cP

;;:::

Beaupre
Clermont

Laurentide

Status

>2057

610

Active

Active

65

370

000023

Petit-Paris

Lumber

80

lOO

Petit-Saguenay

Lumber

40

20

Roberval

Lumber

lOO

170

Saint-Fulgence

Lumber

130

135

Saint- Fulgence

Lumber

170

135

Saint- Felicien

Lumber

100

Saint- Hilarion

Lumber

50

Saint- Prime

Lumber

83

Saint- Thomas

Lumber

90

Senneterre

Lumber

85

115

Newsprint
Lumber

253 000 t
151MMjbm

269
125

Newsprint

253 000 t
151 MMtbm

269
125

Lumber

151 MMtbm

125

Lumber

500MMjbm

309

Lumber

500 MMtbm

309

Pulp& Paper
Newsprint

1 776 000 t
1 633 000 t [292 000 t]

3027[170]

Augusta (GA)

Newsprint

464 000 t

380

Active

Calhoun (TN)

Pulp & Paper


Newsprint

485 000 t
243 000 t

847

Active

Catawba (SC)

Pulp & Paper

1 010 000 t

918

Active

Newsprint

[292 000 t]

[170]

Idle (Dec 2008)

Pulp & Paper


Newsprint

281 000 t
364 000 t

503

Active

Grenada (MA)

Newsprint

279 000 t

185

Active

Usk (WA)

Newsprint

283 000 t

194

Active

Newsprint

258 000 t/220 000 t]

211[350]

Mokpo (South Korea)

Newsprint

258 000 t

211

Active (for sale)

Bridgewater (UK)

Newsprint

[220 000 t]

[350]

Idle

NovaScotia
Liverpool
Oakhill

British Columbia
Mackenzie

United States

Claibome (AL)
Coosa Pines (AL)

Rest of World

120

Active

000024

Page 1 of3

Message

Vanstone, Melanie
From:

Will, Jonathan

Sent:

December 18, 2008 9:57AM

To:

Flowers, William; Bordeleau, Annik

Subject: FW: AbitibiBowater- Newfoundland

-----Original Message----From: Paquette, Jacques


Sent: Thursday, December 18, 2008 7:55 AM
To: Will, Jonathan
Cc: Diego, Brigitte
Subject: FW: AbitibiBowater - Newfoundland

-----Original Message----From: Levin, Matthew


Sent: Wednesday, December 17, 2008 3:55PM
To: Paquette,Jacques
Cc: Diego, Brigitte; Carriere, Claude; Venner, Gordon; Whittaker, Robyn
Subject: FW: AbitibiBowater - Newfoundland

From: Stephenson, Don -TPC

Sent: December 17, 2008 2:43 PM


To: Burney, Ian -TPX; Ready, Robert -TBI; Robertson, Paul -TPN; Feldman, Elaine -GNM; Levesque, Louis -DMT;
Bossenmaier, Greta -DMA
'
Cc: Shapardanov, Chris -USS; Kamarianakis, Emmanuel -DMT; Sharma, Vikas -DMA; Lyons, Deborah -GND;
Levin, Matthew -PCO/BCP; Watson, Lynda -GNB; Saint-Jacques, Guy -WSHDC -DHOM; Harper, Susan -WSHDCTD; Moen, Martin -TNN
Subject: RE: AbitibiBowater - Newfoundland
8 19 1
" ( )
I just took a call from
AbitibiBowater. He asked what the federal government's position was
on the action taken by Newfoundland. I indicated that we had insufficient information to determine whether trade
obligations were violated by the action. I asked what he could send me to help understand the issues: what
assets are we talking about; the ownership of those assets (they have cutting rights on public lands but also
own land and - presumably -the timber rights; they also own hydroelectric facilities on public waterways); the
legal basis of their access to public land timb~r and water, and the terms, if any, of termination of such access;
their understanding of the legal basis for the Government of Newfoundland's action; and AbitibiBowater's counter
arguments.
promised to get me something as soon as possible. His remarks were, otherwise, s.21 (1 )(b)
focussed on their efforts to work constructively with the Province and their complete surprise at the action taken
by the Premier.

2010-10-28

000025

Message

Page 2 of3

Don Stephenson
Assistant Deputy Minister, Trade Policy & Negotiations I Sous ministre adjoint, Politique et negociations
commerciales
Foreign Affairs & International Trade Canada I Affaires etrangeres et Commerce international Canada
111 Sussex Drive, 8th floor, Sussex Pavillion I 111, promenade Sussex. Bieme etage, Pavilion Sussex
Ottawa, Ontario, Canada, K1N 1J1
Tel.+ 613 992-0293
5 .16(2)
Fax+ 613 996-1667

From: Robertson, Paul -TPN

Sent: December 17, 2008 2:02PM


To: Feldman, Elaine -GNM; Ll~vesque, Louis -DMT; Bossenmaier, Greta -DMA
Cc: Shapardanov, Chris -USS; Kamarianakis, Emmanuel -DMT; Sharma, Vikas -DMA; Stephenson, Don -TPC;
Lyons, Deborah -GND; Levin, Matthew -PCO/BCP; Watson, Lynda -GNB; Ready, Robert -TBI; Saint-Jacques, Guy WSHDC -DHOM; Harper, Susan -WSHDC -TD; Moen, Martin -TNN
5.19(1)
Subject: Re: AbitibiBowater - Newfoundland

5.21 (1 )(b)
Message Sent from a Blackberry device:
PauiRobertson, TPN

From: Feldman, Elaine -GNM


To: Levesque, Louis -DMT; Bossenmaier, Greta -DMA
Cc: Shapardanov, Chris -USS; Kamarianakis, Emmanuel -DMT; Sharma, Vikas -DMA; Stephenson, Don -TPC;
Lyons, Deborah -GND; Levin, Matthew -PCO/BCP; Watson, Lynda -GNB; Robertson, Paul -TPN

Sent: Wed Dec 17 12:15:20 2008


Subject: FW: AbitibiBowater - Newfoundland
FYI. Note reference to Abitibi Bowater CEO speaking to Canadian Ministers, as well as US officials.
Elaine Feldman
Assistant Deputy Minister, North America/Sous-ministre adjointe, Amerique du Nord
Foreign Affairs and International Trade Canada/Affaires etrangeres et Commerce international Canada
Tel/tel: 613-944-6183 fax/telecopieur: 613-944-0561
E-mail/courriel: elaine.feldman@international.gc.ca

From:

[mailto:1
uuo J.:11 PM
To: Stephenson, Don -TPC
Cc: Feldman, Elaine -GNM
Subject: AbitibiBowater - Newfoundland

Sent: Ut:!C:t:!moer

5.19(1)

1.1,

Bonjour Don,

2010-10-28

000026

Message

Page 3 of3

As you are aware, Abitibi Bowater is the largest forest products company in Canada employing over 12,000
people.
They are headquartered in Montreal and have mills in NS, QC, ON and BC.
They are the third largest North American company in the sector and largest newsprint manufacturer in the
world.
This week, the Newfoundland government passed legislation effectively expropriating their property in that
province as a reaction to their announcement that they are closing the mill in Grand Falls.

5.19(1)
5.20(1 )(b)

2010-10-28

000027

Page 1 of2

Message

Vanstone, Melanie
From:

Will, Jonathan

Sent:

December 18, 2008 3:14 PM

To:

Flowers, William; Bordeleau, Annik

Subject:

FW: Abitibi Bowater

Importance:

High

Attachments:

-----Original Message----From: Levin, Matthew


Sent: Thursday, December 18, 2008 12:34 PM
To: Will, Jonathan
Cc: Whittaker, Robyn
Subject: FW: Abitibi Bowater
Importance: High

s.21 (1 )(b)

Matthew

-----Original Message----From: paul.robertson@international.gc.ca [mailto:paul.robertson@international.gc.ca]


Sent: Thursday, December 18, 2008 11:38 AM
To: Levin, Matthew
Subject: FW: Abitibi Bowater
Importance: High
Good talking to you Matthew. Here are the most recent products. Paul

From: Ready, Robert -TBI


Sent: December 18, 2008 11:13 AM
To: Robertson, Paui-TPN
Subject: Abitibi Bowater
Importance: High

s.21 (1 )(b)

2010-10-28

000028

Message

Page 2 of2

I have cut into this email the piece that I flipped to you and Don this morning that provides some context on
the federal role in NAFTA Chapter 11 cases.
+++++++++++++++++++++++++++++++++++++++++++

The NAFTA is a trilateral agreement to which the Governments of Canada, the United States and Mexico are
the sole Parties. Chapter 11 of the NAFTA allows for a private right of action by an individual investor against
a Party before an arbitral tribunal for actions taken by federal, provincial or state and local governments in
violation of its provisions. As the federal government is the party pursuant to the NAFTA, it is therefore the
respondent to Chapter 11 cases, including any cases that are brought forward as a result of provincial
measures. The Government of Canada is responsible for provincial measures based on NAFTA Article 105.
Currently, there are seven cases at varying stages of arbitration that involve provincial measures (GreinerQuebec; Bishop- Quebec; Dow- Quebec; Galla- Ontario; G.L. Farms- Ontario; Centurion- British
Columbia; and Bilcon - Nova Scotia). An additional case, Merrill & Ring, asserts claims against federal
measures only, but the investor has now included provincial measures.
The Government of Canada leads the defence of all NAFTA Chapter 11 litigation. Although there is an
existing practice regarding the defense of cases involving provincial measures, it is not codified or consistent.
Perhaps more importantly, there has never been formal consideration of financial responsibility for
settlements or awards arising from NAFTA Chapter 11 claims.

5.14

2010-10-28

000029

1+1

Foreign Affairs and


International Trade Canada

Affaires etrangeres et
:
Commerce international Canada'- -

:"'"; : :;,
-S,-21
.......
(1 )(b),,,,,

CLASSIFICATION

P~?6~~?99~L .
_MEM()RAN[)UM_FOR_INF()RMATI()I>J_

[TO:
ISSUE:

.. The Minister of lnternati_on(ll Trade _


Government of Newfoundland and Labrador - Legislation regarding
AbitibiBowater operations in the province

SUMMARY:
The Government of Newfoundland and Labrador yesterday introduced, and the legislature
passed, a bill that takes control of important assets of AbitibiBowater in the province.
The assets in question are hydro rights, including hydro, power stations, and timber rights that
were granted to the company in 1905.
The Government of Newfoundland and Labrador has indicated that they are taking control of
these assets as a result of AbitibiBowater's decision to cease its operations in the province.
The company has recently announced that it will be closing its plant in Grand Fall in March
2009.
AbitibiBowater has reacted in the media to say that they are reviewing all legal options and
that the measures taken by the Newfoundland and Labrador government open the door to
some potential U.S.-Canada trade issues.
We are advised that company executives intend to speak with US Administration officials
(Commerce Secretary and USTR). The U.S. Embassy in Ottawa has also expressed an
interest in the situation and is following the issue closely. Company executives may also be
seeking to contact Canadian Ministers to discuss the situation.
This memorandum provides you with initial speaking points should you be approached on the
issue. We have also shared them with officials in Natural Resources Canada who indicate
that their Minister is interested in this issuE;.

lL()Ui!l Le11esque ..... ___ . _. . ___ . _______ . _..


Deputy Minister of International Trade

000030

5.21 (1 )(b)
-2-

CLASSIFICATION

BACKGROUND:

1.

tT-~~~G~Y~f!"!rD_~f!~_qf_N~~~~n~t~-~~-~n~-~-~Rr~_fJS?LY_~~t~r~~y-~~Jrq9_~-~~~-~-~~-c;l-~h~--

______________ ..... rl

legislature passed, a bill that takes control of important assets of AbitibiBowater in the province.
This action, to "repatriate to the province" the natural resources of the province, has the effect of
taking control over AbitibiBowater rights to hydro, power plants and timber rights. The action has
been justified as a result of decisions by the company to cease operations in Newfoundland and
Labrador in March 2009.
2.
AbitibiBowater has reacted in the media to say that they are reviewing all legal options
and that the measures taken by the Newfoundland and Labrador government open the door to
some potential U.S.-Canada trade issues. lt is important to note that this issue would not fall
under the Softwood Lumber Agreement. However, obligations related to the NAFTA might be
relevant.

3.
NAFTA Chapter 11 (Investment) describes several obligations with respect to the
treatment that, in the case of Canada, must be accorded to US and Mexican investors and their
investments in Canada. An alleged breach of these obligations can lead to claim before an
internatior~al arbitration tribunal with a view to receiving financial compensation for losses
incurred.
4.
Although AbitibiBowater's headquaners and executive office are locat~d in Montreal, the
company is incorporated in Delaware. lt is very likely that the company would be considered a
US-owned and controlled enterprise and meet the definition of an "investor of a Party" under
Chapter 11. The legal rights, facilities, etc. that it owns in Newfoundland would also meet the
definition of "investment".
5.
Provisions of particular interest in this c3se are the Minimum Standard of Treatment
(Article 11 05) and the Expropriation (Article 111 0) obligations. The Expropriation Article sets out
that the only expropriations permitted are those that are for a public purpose, non-discriminatory,
in accordance with due process of law and on payment of compensation equal to the fair market
value. The Minimum Standard of Treatment Article provides that a Party like Canada must treat
investments of US and Mexican investors in accordance with international law, including fair and
equitable treatment and full protection and security.
6.
The Department was not been consulted by Newfoundland and Labrador on this matter
and the only information we have at the present time is Premier William's statement to the
legislature and media reports. We have contacted Newfoundland and Labrador officials to
obtain additional information so that we can conduct a preliminary assessment of the way in
which our trade obligations may be implicated in this matter.
7.
A
'\bitibiBowater,
;ontacted the Assistant Deputy Minister's office,
Don Stephenson, to understand me Teaeral government's position on the action taken by
Newfoundland and Labrador. ADM Stephenson indicated that we had insufficient information to
determine whether trade obligations were violated by the action of Newfoundland and Labrador
and asked for further information on the company assets and rights as well as their
understanding of the legal basis for the Government of Newfoundland's action.
remarks seem to focus on the company's efforts to work constructively with the Province and
their complete surprise at the action taken oy the Premier.

5.19(1)

000031

-38.

CLASSIFICATION

Media lines which could also serve as your talking points are attached.

000032

1+1

Foreign Affair$ and


lntemationalTradeCanada

Measures taken by the Government of Newfoundland and Labrador


concerning AbitibiBowater

ISSUE:
The Government of Newfoundland and Labrador passed legislation on December 16, 2008 to take
control of AbitibiBowater Inc.'s main assets in the province.

MEDIA LINES:

The government of Canada is gathering information on the circumstances leading to the


government of Newfoundland and Labrador's recent decision relating to Abitibi Bowater's
assets located in its province and the measures they had taken.

No direct allegations by the company have been made with respect to Canada possibly
violating any international trade obligations.

lt is premature to raise concerns in regards of Canada's international trade obligations since the
government of Newfoundland and Labrador and AbitibiBowater Inc. are reportedly set to enter
into negotiations over compensation

Canada

000033

Questions and Answers


Responsive only
1. Was the Government of Canada aware of the measures the government of
Newfoundland and Labrador was planning to take?

Government of Canada was not aware of the measures adopted on December 16, 2008 by
the Government of Newfoundland and Labrador.

Canada is consulting with the province to gather information on the province's recent
decision.

2.

Do the measures taken by the Government of Newfoundland and Labrador violate


Canada's obligations under NAFTA Chapter 11?

lt is premature to consider possible violation of Canada's international trade obligations.

000034

Additional Background Information

The Government of Newfoundland and Labrador yesterday introduced, and the


legislature passed, a bill that takes control of important assets of Abitibi-Bowater in the
province, with the exception of the mill in Grand Falls-Windsor. This action, to
"repatriate to the province" the natural resources of the province has the effect of taking
control over Abitibi-Bowater rights to hydro, power plants and timber rights. The action
has been justified as a result of decisions by the company to cease operations in
Newfoundland and Labrador in March 2009.
Abitibi-Bowater has reacted in the media to say that they are reviewing all legal options
and that the measures taken by the Government of Newfoundland and Labrador open
the door to some potential U.S.-Canada trade issues. While there have been no formal
allegations of a breach of NAFTA that have been made to date the company has noted
that obligations related to the NAFTA might be relevant.
The department was not consulted by Newfoundland and Labrador on this matter and
the only information we have at the present time is Premier William's statement to the
legislature and media reports. We have contacted Newfoundland and Labrador officials
to obtain additional information so that we can conduct a preliminary assessment of the
way in which our trade obligations may be implicated in this matter.

Media calls to be directed to DFAIT


Trade Media Relations Office
Foreign Affairs and International Trade Canada

(613) 996-2000

000035

Abitibi-Bowater Issues

The Government of Newfoundland and Labrador introduced, and the legislature passed, on
December 16, 2008 a bill that takes control of important assets of AbitibiBowater in the province.
The assets in question are hydro rights, including hydro-power stations, and timber rights. The
Act also has an impact on the investment of another foreign company, ENEL, a major energy
company in Italy, as the government is also seizing rights of AbitibiBowater's joint-venture, Star
Lake Hydro Partnership.
The Government of Newfoundland and Labrador has indicated that they are taking control of
these assets as a result of AbitibiBowater's decision to cease its operations in the province. The
company has recently announced that it will be closing its plant in Grand Falls in March 2009.

5.14
5.15(1)
5.21 (1 )(a)
5.21 (1 )(b)

000036

Page 37
is withheld pursuant to sections
est retenue en vertu des articles

14, 15(1 ), 21 (1 )(a), 21 (1 )(b)

of the Access to Information Act


de la Acces

a l'information

Vanstone, Melanie
Sent:
To:
Subject:

Bordeleau, Annik
December 19, 2008 11:29 AM
Vanstone, Melanie
FW: URGENT - NFLD/Abitibi

Importance:

High

From:

Another e-mail I forgot to forward you.

The note is coming soon.

Thanks!
-----Original Message----From: Will, Jonathan
Sent: Thursday, December 18, 2008 12:26 PM
To: Flowers, William; Bordeleau, Annik
Subject: FW: URGENT - NFLDIAbitibi
Importance: High
-----Original Message----From: Behboodi, Rambod
Sent: Thursday, December 18, 2008 11:53 AM
To: Will, Jonathan
Cc: Mondou, Isabelle
Subject: FW: URGENT - NFLDIAbitibi
Importance: High
Jonathan

5.23
Rambod Behboodi
Legal Operations I Operations juridiques
Privy Council Office I Bureau du Conseil prive
806-C, 90 rue Sparks Street
Ottawa, Ontario
K1A OA3 Canada
+1 613 948 6676
+1 613 957 5032 (fax)

5.16(2)
1

000038

5.16(2)

rambod.behboodi@pco-bcp.gc.ca

Ce courriel pourrait contenir des renseignements confidentiels ou privilegies. Si vous


n'etes pas le veritable destinataire, veuillez nous en aviser immediatement. Merci.
This e-rnail may contain confidential or privileged information. If you are not the
intended recipient, please notify us immediately. Thank you.
-----Original Message----From: Eric.Leroux@international.gc.ca [mailto:Eric.Leroux@international.gc.ca)
Sent: Thursday, December 18, 2008 11:41 AM
To: Behboodi, Rarnbod
Subject: FW: URGENT - NFLDIAbitibi

Eric H. Leroux
Deputy Director I Directeur adjoint
Senior Counsel I Avocat-conseil
Trade Law Bureau I Direction du droit commercial international
Tel.: (613) 944-8006; Fax: (613) 944-0027 Eric.Leroux@international.gc.ca

5.23

This message is subject to solicitor-client privilege.

000039

Vanstone, Melanie
From:
Sent:
To:
Cc:
Subject:

Vanstone, Melanie
December 19, 2008 4:24PM
Sambol, Joseph
Bordeleau, Annik
RE: Urgent policy check: AbitibiBowater

Hi Joe,
I am fine with these lines except the last one.

I've cc'd Annik who is the lead on the file in case she has any further comments.

-----Original Message----From: Sambol, Joseph


Sent: Friday, December 19, 2008 4:18 PM
To: Vanstone, Melanie
Subject: Urgent policy check: AbitibiBowater
Melanie,
Are you ok with these lines regarding this issue? I must admit I'm not familiar with these
terms I language.
Measures taken by the Government of Newfoundland and Labrador concerning AbitibiBowater
(updated Dec. 19)
ISSUE:
The Government of Newfoundland and Labrador passed legislation on December 16, 2008 to
take control of AbitibiBowater Inc.'s main assets in the province.
MEDIA LINES:
Canadian governments have the authority to regulate the economy within their
jurisdiction. Such regulation can, from time to time, affect the assets of private
companies, including, in some limited circumstances, by way of expropriations
Canada's international trade obligations recognize the right to regulate, including to
expropriate, provided that the expropriation is for a public purpose, not discriminatory,
performed according to due process and accompanied by fair market value compensation.
The measures that have been taken with respect to AbitibiBowater are measures of the
Government of Newfoundland and Labrador.
The Government of Canada is in the process of
gathering information on these measures.

----- Original Message


From: Sambol, Joseph
To: Vanstone, Melanie

s.21 (1 )(b)
1

000040

Sent: Fri Dec 19 15:59:54 2008


Subject: AbitibiBowater
Melanie,
Please see wire story. Lines are with MinO now and should come along later today.

s.68(a)

000041

Sawmill exports to US

Page 1 of 1

Gilbert, Anne
From:

Paul Parsons [Paui.Parsons@acoa-apeca.gc.ca]

Sent:

December 19, 2008 1:30 PM

To:

Gilbert, Anne

Subject: Sawmill exports

Total for 2007: $6.0 million


Source: Canadian Trade Date Online - Statistics Canada
Paul

The information contained in this e-mail may contain confidential


information intended for a specific individual and purpose. The
information is private and is legally protected by law. If you are not
the intended recipient, you are hereby notified that any disclosure,
copying, distribution or the taking of any action in reliance on the
comments of this information is strictly prohibited. Ifyou have received
this communication in error, please notify the sender immediately by
telephone or return e-mail.
Thank you.

**
L'information contenue dans ce courriel peut etre de nature confidentielle
et elle est destinee aune personne precise dans un but precis.
L'information est privee et protegee par la loi. Si vous n'etes pas le
destinataire du message, vous etes, par la presente, avise que toute
divulgation, reproduction, distribution ou action prise en s'appuyant sur
cette information sont strictement interdites. Si vous avez re9u ce
message par erreur, veuillez en informer l'expediteur sur-le-champ, par
telephone ou par courriel.
Merci.

--------------------------------------------------------------------------------

2008-12-19

000042

Page 1 of2
NATIONAL POST

Dec 20,2008

Edition: National Section: Financial Post Page:

AbitibiBowater fires back at Newfoundland Premier; Letter argues province


violated trade law
Paul Vieira

Black & White Photo: Daniel Acker, Bloomberg News I David Paterson, chief executive of
AbitibiBowater Inc. After Newfoundland and Labrador expropriated the company's timber,
water and hydroelectric assets, a letter was sent to the Premier threatening legal action against the
province. ; Black & White Photo: Greg Locke, Reuters Files I Premier Danny Williams: Move
could lead to NAFTA claim by AbitibiBowater.;
OTTAWA- AbitibiBowater Inc. says the Newfoundland and Labrador government, led by Premier Danny Williams,
violated international trade law by expropriating the company's timber, water and hydroelectric assets, and it is
"determined" to pursue its rights through the courts.
"Failing an agreed resolution or full and timely compensation, AbitibiBowater is determined to pursue its rights
against the government of Newfoundland and Labrador to the fullest extent available in connection with the
serious and unlawful infringement of its rights," David Paterson, the newsprint maker's chief executive, said in a
scathing letter sent yesterday to Mr. Williams.
"These confiscatory and hostile actions do no good for the people of Newfoundland and Labrador, their
communities, their province or the country as a whole."
Ironically, should the Mont-real company follow through on its legal threat, it would be up to the federal
Conservative government to defend the province against allegations that NAFTA rules were violated. Mr. Williams
and Stephen Harper, the Prime Minister, have had a tumultuous relationship, although things appear to be
improving between St. John's and Ottawa.
Mr. Williams, who has a history of confrontational approaches with companies, moved to revoke Abitibi-Bowater's
natural resource rights and put its power plants under the control of the province. The move was in response to
AbitibiBowater's decision to shut down its pulp-and-paper mill in Grand Falls-Windsor, effective March 28.
an
"This is a very hard-hitting letter and there is much here to be taken seriously," said Lawrence
international trade lawyer at Cassels Brock and Blackwell, who said earlier this week that it was "virtually certain"
that the dispute would result in a NAFTA claim.
"Obviously, the company is not going to take this without a long and aggressive fight, judging from the tone of the
letter."
Mr. Paterson informed the Newfoundland Premier that the company had retained "prominent" lawyers, among
them experts in constitutional and trade law, to defend its interests. "We have been advised that these actions
clearly and unequivocally are illegal."
Chapter 11 under NAFTA allows companies to invoke binding arbitration against countries that violate investors'
rights. lt provides for direct actions against governments, with enforceable awards and no right of appeal.
Moreover, Mr. Herman said, the provision gives numerous advantages to an aggrieved investor.
In the letter, Mr. Paterson said that the company's rights were violated, and that it is eligible for compensation,
equivalent to the fair market value of the assets expropriated. Further, it is alleged Mr. Williams' actions, as
outlined in a bill passed by the provincial legislature, discriminate against the company -- prohibited under rules
governing NAFTA.
Meanwhile, in an unrelated development, AbitibiBowater said it was looking to refinance a US$347-million term
loan next month before the debt comes due in March.

http:l/news-intranet/scoop/showstory.asp?f=file:F:/Internet/Clippings/INFOMART/2008...

2009-01-19

000043

Page 2 of2
The company is trying to sell assets to raise cash amid looming debt maturities and declining North American
newsprint demand. The company, which has US$6.2-billion in total debt, is "considering all options," Mr. Paterson
told Bloomberg News.
pvieira@nationalpost.com

http://news-intranet/ scoop/showstory.asp?f::=file:F :/Intemet/Clippings/INFOMART /2008...

2009-01-19

000044

Vanstone, Melanie

To:

Paquette, Jacques
December 22, 2008 12:52 PM
Caron, Tiffany

Cc:

Van~tnnA

Subject:

FW:

From:
Sent:

MAI;miA rlinnn Briaitte Bordeleau_ Annik: Will. Jonathan

s.19(1)
pic20888.jpg

Attachments:

pic20888.jpg (18
KB)

s.13(1)
s.14

-----Original Message----From: Jean, Daniel


Sent: Monday, December 22, 2008 11:58 AM
To: Paquette, Jacques
Cc: Carriere, C1aude; Morin, Marie-Lucie
Subject: FW:

s.19(1)

Jacques pour le suivi du dossier.


Claude et Marie-Lucie, pour votre info.
Premiere note qui parte sur les faits est
maintenant avec Greffier. Deuxieme notre sur strategie est en preparation.
Daniel

s.13(1)
s.15(1)

000045

Pages 46 to I

a 50

are withheld pursuant to section


sont retenues en vertu de l'article

13(1)

of the Access to Information Act


de la Acces

a l'information

5.14
Abitibi Bowater Timelines

5.15(1)
5.21 (1 )(b)

Activity to Date

Dec 4, 2008

AbitibiBowater (AB) announces closure of newsprint plant in Grand FallsWindsor to take place in March 2009

Dec 16,2008

Call to DFAIT from


re: NAFTA
Implications
Legislation regarding Abitibi-Bowater passed in Nfld/Lab House of
Assembly

5.19(1)
Dec20

MINT speaks
MINT
discussed the circumstances surrounding the
initiation of legislation. Apparently the prov considers it made some kind of
offer on the Friday and that the company turned it down on the Monday.
also considers that he gave plenty of signalling to the company in
the context of scrums with media as this situation unfolded.
indicated he had been in touch with the Italian company to
reassure them that they were welcome in NFLD.
is open to sitting down with company again.
MINT raised the NAFTA issue and noted that in any litigation Canada would
be respondent and that therefore we have an abiding interest in being
aware of developments and in the resolution of the issue.
understands that.
The file is being run out of premier's officewill try to contact him to get a working level contact for us to liaise
with.
MINT will likely be back in touch with the company to relay the fact that
is open to meet.

000051

5.14
5.15(1)
5.19(1)
5.21 (1 )(b)
5.20(1 )(c)

Future Events/Possible NAFT A Timelines

000052

December 2009

Appointment of Arbitrators
Both Parties have 90 days to appoint their arbitrator.

Fall-Spring
2010/2011
Summer/Fall
2011
Winter 2012

Written Memorials
Tribunal holds hearings

5.15(1)

Arbitral Award

5.21 (1 )(b)

000053

Page 1 of2

NATIONAL POST

Jan 07,2009

Edition: National Section: FP Comment Page: FP15

Danny's NAFTA mess; Canada could join other countries, like Bolivia, which
attract foreign investors and then ignore their rights
J. Michael Robinson

The expropriation by Newfoundland and Labrador of rights and assets of AbitibiBowater has revived debate on
the oft-criticized Chapter 11 of NAFTA. Some misunderstandings have appeared and a "sleeping giant"
constitutional issue seems to have been overlooked.
First, let's review Ch. 11 and its place in the world of investment promotion and protection agreements. In the
1960s, to stimulate foreign investment, chiefly in developing countries, the United States pioneered such
agreements, commonly called BITs (bilateral investment treaties). In 1966, the World Bank created a facility for
resolving disputes under them: the International Centre for the Settlement of Investment Disputes (ICSID). The
convention establishing ICSID currently has 143 country members (Canada has a constitutional problem that still
prevents it from joining; more on that later).
There are currently approximately 2,400 BITs worldwide. Canada has 23 of them and is seeking more, with China
and India for example.
Most disputes claiming mistreatment of a foreign investor protected by a BIT are dealt with in binding international
arbitration at ICSID: 151 cases since 1966 with 124 pending. So clearly Ch. 11 is neither novel nor unusual.
Hundreds of countries offer protections to foreign investors and are sued when they breach them.
Neither NAFTA nor these 2,400 BITs forbids expropriation, contrary to popular misunderstanding; rather, they
condition it. Expropriation must be for a public purpose, done with due process, without discrimination and
accompanied by prompt payment of fair market value compensation.
Who responds to a claim of illegal expropriation by a province? Only Canada. NAFTA neither holds the province
liable nor creates any method for Canada to recoup damages awarded by the arbitral tribunal. That's Canada's
problem.
Does the provincial expropriation bill (made into law --an Act-- in one day) violate Ch. 11? This observer says it
clearly does.
Consider due process. Our parliamentary traditions require that a bill be studied in committee, allowing input from
the House members, press and public.
What about compensation? This act says that the government (read Premier Danny Williams) will determine
compensation in its discretion. The act also says" ... a person is not entitled to compensation from the Crown
[Newfoundland and Labrador government] or a minister, employee or agent of the Crown arising from, resulting
from or incidental to the operation of this Act" (s. 10 (1)).
But international treaties override domestic laws so NAFTA trumps the act. Ch. 11 also contains general
obligations to give investors from the three NAFTA countries "national" and "fair and equitable" treatment under
international law, and it is solely international law which applies to NAFTA.
Does the Canadian charter of Rights and Freedoms say anything about this? The Charter protects personal rights
only and does nothing for property or corporate rights.
So does the above analysis mean that foreign investors have better protection from unfair or arbitrary parliaments
and legislatures than Canadians? Yes, they do.
Recall, for example, the affair of Toronto's Pearson airport terminal one. Then-prime minister Jean Chretien tore
up the signed contract with a private group to build and operate it in a public/private partnership, claiming former
Prime Minister Brian Mulroney had awarded it to Tory cronies. The bill of cancellation gave the private investors

http://news-intranet/ scoop/showstory .asp?f=file:f:/intemet/todayclippings/infomart/2009...

2009-01-07

000054

Page 2 of2
only their actual out-of-pocket costs, minus any for "consulting" (read lobbying).
However, Mr. Chretien seemed to have forgotten, or chose to ignore, that there was a large U. S. investor in the
group. The bill was legal respecting Canadians-- because Parliament is supreme, save for the Charter (see
above)-- but it was clearly illegal under NAFTA Ch. 11. The bill was withdrawn and a complex buy-out of the
private investors in terminal three (most also being those in terminal one) was finally substituted.
Let's hope this current mess gets sorted during the six-month cooling off and negotiation period before a Ch. 11
claim can be filed. Negotiations should be three-way to succeed, involving the investor and the two governments.
There is a constitutional position Mr. Williams could take. To paraphrase: "You Feds signed NAFTA and the law of
Canada says provinces aren't bound by international agreements affecting their exclusive Constitutional rights,
unless they accept them too." The case is Labour Conventions decided by the English Privy Council, then
Canada's final appeal court, in the 1930s and legislating "property and civil rights within the province" is clearly an
exclusive provincial power. Canada's Supreme Court has never reversed that decision.
So Mr. Williams could say: "Canada, defend my expropriation for me and pay the damages if (when) you lose."
That stance is unlikely to assist our often-fraught federal-provincial relations, particularly with that province.
One hopes for a traditional Canadian solution: The three parties cut a deal so everybody "wins," or at least saves
face and stays out of the constitutional court and a binding international arbitral tribunal.
I am not alone in fearing that Canada could join Venezuela, Bolivia, Argentina and other countries which attract
foreign investors with international investor protection agreements but ignore them when it suits their needs, hurts
and wants. That stain on our international reputation and ability to attract much-needed foreign investment must
somehow be finessed. Carry on Canada (and Danny Williams)!- J. Michael Robinson is Counsel, Fasken
Martineau Dumoulin LLP, and Adjunct Faculty, University of Western Ontario Faculty of Law.

http://news-intranet/ scoop/ showstory .asp?f=file: f:/intemet/todayclippings/infomart/2009...

2009-01-07

000055

Page 1 of3

Smith, Robert
From:

Boyer, Nicolas

Sent:

January 7, 2009 8:56AM

To:

Smith, Robert; Oliver, Peter

Cc:

Laporte, Johanna; Aterman, Paul; Showell, David

Subject: TR : Danny Williams- Abitibi Bowater


Robert/Peter, this could interest you as well.
Nicolas Boyer
Analyste principal/ Senior Analyst
Communications et Affaires parlementaires I Communications and Parliamentary Affairs
Bureau du Conseil prive I Privy Council Office
(613) 947-7703
nooyer@pco_~oc.:p.ge,ca

-----Message d'origine----De: Boyer, Nicolas


Envoye : 7 janv. 2009 08:54

A.:

5.16(2)
5.19(1)

Cc : Florea, Pierre; Coleman, Ralph


Objet : Danny Williams - Abitibi Bowater

Nicolas.

NATIONAL POST

Jan 07,2009

Edition: National Section: FP Comment Page: FPIS

Danny's NAFTA mess; Canada could join other countries, like Bolivia, which
attract foreign investors and then ignore their rights
J. Michael Robinson

The expropriation by Newfoundland and Labrador of rights and assets of AbitibiBowater has revived debate on
the oft-criticized Chapter 11 of NAFTA. Some misunderstandings have appeared and a "sleeping giant"
constitutional issue seems to have been overlooked.
First, let's review Ch. 11 and its place in the world of investment promotion and protection agreements. In the
1960s, to stimulate foreign investment, chiefly in developing countries, the United States pioneered such
agreements, commonly called BITs (bilateral investment treaties). In 1966, the World Bank created a facility for
resolving disputes under them: the International Centre for the Settlement of Investment Disputes (ICSID). The
convention establishing ICSID currently has 143 country members (Canada has a constitutional problem that still
prevents it from joining; more on that later).
There are currently approximately 2,400 BITs worldwide. Canada has 23 of them and is seeking more, with China
and India for example.
Most disputes claiming mistreatment of a foreign investor protected by a BIT are dealt with in binding international
arbitration at ICSID: 151 cases since 1966 with 124 pending. So clearly Ch. 11 is neither novel nor unusual.
Hundreds of countries offer protections to foreign investors and are sued when they breach them.
Neither NAFTA nor these 2,400 BITs forbids expropriation, contrary to popular misunderstanding; rather, they

2010-12-10

000056

Page 2 of3
condition it. Expropriation must be for a public purpose, done with due process, without discrimination and
accompanied by prompt payment of fair market value compensation.
Who responds to a claim of illegal expropriation by a province? Only Canada. NAFTA neither holds the province
liable nor creates any method for Canada to recoup damages awarded by the arbitral tribunal. That's Canada's
problem.
Does the provincia~ expropriation bill (made into law --an Act-- in one day) violate Ch. 11? This observer says it
clearly does.
Consider due process. Our parliamentary traditions require that a bill be studied in committee, allowing input from
the House members, press and public.
What about compensation? This act says that the government (read Premier Danny Williams) will determine
compensation in its discretion. The act also says" ... a person is not entitled to compensation from the Crown
[Newfoundland and Labrador government] or a minister, employee or agent of the Crown arising from, resulting
from or incidental to the operation of this Act" (s. 10 (1 )).
But international treaties override domestic laws so NAFTA trumps the act. Ch. 11 also contains general
obligations to give investors from the three NAFTA countries "national" and "fair and equitable" treatment under
international law, and it is solely international law which applies to NAFTA.
Does the Canadian charter of Rights and Freedoms say anything about this? The Charter protects personal rights
only and does nothing for property or corporate rights.
So does the above analysis mean that foreign investors have better protection from unfair or arbitrary parliaments
and legislatures than Canadians? Yes, they do.
Recall, for example, the affair of Toronto's Pearson airport terminal one. Then-prime minister Jean Chretien tore
up the signed contract with a private group to build and operate it in a public/private partnership, claiming former
Prime Minister Brian Mulroney had awarded it to Tory cronies. The bill of cancellation gave the private investors
only their actual out-of-pocket costs, minus any for "consulting" (read lobbying).
However, Mr. Chretien seemed to have forgotten, or chose to ignore, that there was a large U. S. investor in the
group. The bill was legal respecting Canadians -- because Parliament is supreme, save for the Charter (see
above)-- but it was clearly illegal under NAFTA Ch. 11. The bill was withdrawn and a complex buy-out of the
private investors in terminal three (most also being those in terminal one) was finally substituted.
Let's hope this current mess gets sorted during the six-month cooling off and negotiation period before a Ch. 11
claim can be filed. Negotiations should be three-way to succeed, involving the investor and the two governments.
There is a constitutional position Mr. Williams could take. To paraphrase: "You Feds signed NAFTA and the law of
Canada says provinces aren't bound by international agreements affecting their exclusive Constitutional rights,
unless they accept them too." The case is Labour Conventions decided by the English Privy Council, then
Canada's final appeal court, in the 1930s and legislating "property and civil rights within the province" is clearly an
exclusive provincial power. Canada's Supreme Court has never reversed that decision.
So Mr. Williams could say: "Canada, defend my expropriation for me and pay the damages if (when) you lose."
That stance is unlikely to assist our often-fraught federal-provincial relations, particularly with that province.
One hopes for a traditional Canadian solution: The three parties cut a deal so everybody "wins," or at least saves
face and stays out of the constitutional court and a binding international arbitral tribunal.
1 am not alone in fearing that Canada could join Venezuela, Bolivia, Argentina and other countries which attract
foreign investors with international investor protection agreements but ignore them when it suits their needs, hurts
and wants. That stain on our international reputation and ability to attract much-needed foreign investment must
somehow be finessed. Carry on Canada (and Danny Williams)! - J. Michael Robinson is Counsel, Fasken

2010-12-10

000057

Page 3 of3
Martineau Dumoulin LLP, and Adjunct Faculty, University of Western Ontario Faculty of Law.

Nicolas Boyer
Analyste principal/ Senior Analyst
Communications et Affaires parlementaires I Communications and Parliamentary Affairs
Bureau du Conseil prive I Privy Council Office
(613) 947-7703
ni:LQ}"ei@pgq~pcp,.gc.ca

5.16(2)

2010-12-10

000058

Page 1 of 1

Message

Gilbert, Anne
From:

Flowers, William

Sent:

January 8, 2009 5:28 PM

To:

Gilbert, Anne

Subject: FW: Abitibi Bowater

Not

Processed

Hi Anne,

Bill

-----Original Message----From: Will, Jonathan


Sent: Thursday, January 08, 2009 5:03 PM
To: Flowers, William
Subject: Abitibi Bowater
The meeting will be taking place Monday, January 12th, 2009 at 11:00 a. m. Please confirm your participation or if you will
send a representative in your place.

Invited:
Jacques Paquette (PCO)
Gordon Venner (PCO)
Natasha Rascanin (PCO)
Isabelle Mondou (PCO)
Don Stephenson (DF AIT)
Meg Kinnear (DF AIT)
Elaine Feldman ( DF AIT)
Jim Farrell (NRCAN)
Denis Gauthier (FIN)

2009-01-09

000059

5.14

Abitibi Bowater Timelines

5.15(1)
5.21 (1 )(b)

Activity to Date

Dec4, 2008

AbitibiBowater (AB) announces closure of newsprint plant in Grand FallsWindsor to take place in March 2009

Dec 16, 2008

Call to DFAIT from


re: NAFTA
Implications
Legislation regarding Abitibi-Bowater passed in Nfld/Lab House of
Assembly

Dec 20

MINT speaks

MINT
discussed the circumstances surrounding the
initiation of legislation. Apparently the prov considers it made some kind of
offer on the Friday and that the company turned it down on the Monday.
also considers that he gave plenty of signalling to the company in
the context of scrums with media as this situation unfolded.

5.19(1)
indicated he had been in touch with the Italian company to
reassure them that they were welcome in NFLD.
is open to sitting down with company again.
MINT raised the NAFTA issue and noted that in any litigat
be respondent and that therefore we have an abiding intf
aware of developments and in the resolution of the issuf
understands that.
The file is being run out of premier's officewill try to contact him to get a working level
with.

.....,.nada would

MINT will likely be back in touch with the company


is open to meet.

000060

s.14
s.15(1)
s.19(1)

s.20(1 )(c)

Future Events/Possible NAFTA Timelines

000061

December 2009

Appointment of Arbitrators
Both Parties have 90 days to appoint their arbitrator.

Fall-Spring
2010/2011
Summer/Fall
2011
Winter 2012

Written Memorials
Tribunal holds hearings

5.15(1)

Arbitral Award

5.21 (1 )(b)

000062

Page 1 of 1

Message

Gilbert, Anne
From:

Mondou, lsabelle

Sent:

January 12, 2009 1:13 PM

To:

Paquette, Jacques

Cc:

'Meg.Kinnear@international.gc.ca'; Bordeleau, Annik; Levin, Matthew; Gilbert, Anne;


Vanstone, Melanie

5.23

Subject:
Attachments:

Tel que discute.


lsabelle Mondou
Director, Legal Operations
Directrice, Operations juridiques
Office of the Counsel to the Clerk of the Privy Council
Bureau du Conseiller juridique aupres du greffier du Conseil prive
613-957-5450

2010-12-06

000063

Page 64
is withheld pursuant to section
est retenue en vertu de l'article

23
of the Access to Information Act
de la Acces

a l'information

Page 65
is withheld pursuant to section
est retenue en vertu de l'article

23
of the Access to Information Act
de la Acces

a l'information

Page 66
is withheld pursuant to section
est retenue en vertu de l'article

23
of the Access to Information Act
de la Acces

a l'information

Page 67
is withheld pursuant to section
est retenue en vertu de l'article

23
of the Access to Information Act
de la Acces

a l'information

Page 68
is withheld pursuant to section
est retenue en vertu de l'article

23
of the Access to Information Act
de la Acces

a l'information

Page 69
is withheld pursuant to section
est retenue en vertu de l'article

23
of the Access to Information Act
de la Acces

a l'information

Page 70
is withheld pursuant to section
est retenue en vertu de l'article

23
of the Access to Information Act
de la Acces

a l'information

Page 71
is withheld pursuant to section
est retenue en vertu de l'article

23
of the Access to Information Act
de la Acces

a l'information

Page 72
is withheld pursuant to section
est retenue en vertu de l'article

23
of the Access to Information Act
de la Acces

a l'information

Page 73
is withheld pursuant to section
est retenue en vertu de l'article

23
of the Access to Information Act
de la Acces

a l'information

Page 74
is withheld pursuant to sections
est retenue en vertu des articles

14, 21 (1 )(a), 21 (1 )(b), 23

of the Access to Information Act


de la Acces

a l'information

llglobeandmail.com: Chapter 11 for Abitibi? No, the other Chapter 11

Page 1 of3

The Law Page: ECONOMIC PROTECTIONISM

Chapter 11 for Abitibi? No, the other Chapter 11


Will use a section ofNAFTA to fight Newfoundland's bid to expropriate the company's local
power and timber rights
JACQUIE MCNISH
JANUARY 14,2009

When the United States pushed in 1994 to insert an investment-protection mechanism in NAFTA,
it wanted insurance against the expropriating tendencies of Mexico, the free-trade pact's new
member.
No one could have imagined then that the rules, known as Chapter 11, would one day be used by
the United States to try to smack down Newfoundland and Labrador. But that is the precisely the
legal club that AbitibiBowater Inc. is threatening to wield if the province and its combative
Premier, Dmmy Williams, do not back down from a brazen bill passed last month to expropriate the
company's local timber and power rights in Newfoundland.
"It shocks common sensibility," AbitibiBowater's chief executive officer, David Paterson, fumed
after the legislation was unveiled. Numerous critics have likened Mr. Williams to Venezuela's
feverishly populist leader Hugo Chavez.
While "Chavez of the North" makes for good headlines, the hue and cry ignores the legal heft
behind Mr. Williams' hardball play. Canada's protections against expropriation of property or
economic rights are weaker than those in the U.S. Constitution. Furthermore, the handful ofU.S.
companies that have challenged Canadian government seizures or business-destroying regulations
under Chapter 11 ofthe North American free-trade agreement have had mixed results.
Print Edition - Section Front

http:/lw~'W.theglobeandmail.com/servlet/story/LAC.20090114.LA WCOLUMN14/TPSto... 2009-01-14

000075

globeandmail.com: Chapter 11 for Abitibi? No, the other Chapter 11

Page 2 of3

tf

The chapter sets out procedures for resolving disputes over legal rights and compensation involved
in expropriations.
What makes the Newfoundland standoff intriguing is how Chapter 11 disputes must be argued.
Who is required to defend Newfoundland under this system? The answer is funnier than
Newfoundland's kiss-the-cod ritual: the federal government. As in the Stephen Harper
administration, which Mr. Williams has raged should be "tossed out" over broken election
promises.
"It is a win-win scenario for Williams," said Todd Weiler, a University of Western Ontario
professor and consultant who specializes in investment treaty arbitration under NAFTA.
"Williams can blame the federal government if it fails to defend the expropriation legislation. But if
the defence works, he gets to make mischief against Ottawa by putting it in the position of
supporting expropriation."
The politically treacherous legal scenario means the stakes will be high for lawyers tapped to argue
the case if it moves to arbitration. Typically, the federal government's respected director-general of
the Trade Law Bureau, Meg Kinnear, would be expected to quarterback such a big case. But
sources say the lawyer, who declined to comment, is planning an imminent career move. Finding a
willing trade lawyer to fill her shoes and take on the politically fraught case won't be easy.
Across the table, AbitibiBowater is lining up some hefty legal firepower. A spokesman declined to
comment, but it is understood that the forest products company has hired an undisclosed U.S. law

http://www.theglobeandmail.com/servlet/story/LAC.20090114.LAWCOLUMN14/TPSto... 2009-01-14

000076

globeandmail.com: Chapter 11 for Abitibi? No, the other Chapter 11

Page 3 of3

firm with international trade expertise. The company is typically advised in Canada by Ogilvy
Renault LLP and Torys LLP, but it is unclear whether local counsel has been retained.
AbitibiBowater must wait six months before it is eligible to challenge Newfoundland under
Chapter 11. Until then, the two sides can be expected to explore whether a settlement can be
reached without arbitration.
At the heart of settlement or arbitration negotiations will be a debate over how much
Newfoundland should pay in compensation for seizing AbitibiBowater's power and timber rights
after the province threw down the gauntlet by offering nothing. The province insists that it owes
AbitibiBowater nothing because the company broke its promise to use local timber and hydro
power to fuel its newsprint mill and the local economy.
When AbitibiBowater announced last month that it planned to close the mill and lay off hundreds
of employees, Mr. Williams stormed that the company had "reneged on the bargain" struck a
century earlier. AbitibiBowater didn't help its case locally by saying after the mill closing
announcement that it planned to sell the timber and hydro assets to reduce debt. That handed the
Premier of a province hypersensitive to the exploitation of its resources political support for
protectionist retaliation.
And maybe, just maybe, creeping protectionism is the subplot here. Government intervention and
economic protectionism is surging around the globe as states rush to shore up domestic businesses
hobbled by the deepening recession. Whether it's Latin American countries expropriating foreign
mining and petroleum assets or the United States injecting billions of dollars to give struggling
financial or auto companies an edge, protectionism is on the rise.
The curious thing about Mr. Williams, however, is that he has chosen to play the protectionist card
in support of a critically ill plant. Even if the province successfully reclaims the timber and hydro
assets, it's doubtful the victory would breathe any life into the outmoded operation. In the current
credit drought, a new partner seems unlikely.
Perhaps this is the Canadian way with expropriations. In 1970, another firebrand, Quebec premier
Rem~ Levesque, passed a law to take control of Asbestos Corp. The province wound up owning a
business that was soon overwhelmed by a wave of asbestos class-action lawsuits. On top of that,
the company was entangled for more than a decade in lawsuits from investors claiming their
investments had been savaged by the expropriation.
In countries with developed legal systems, the legacy of expropriation can be years of legal
headaches.
Copyright 2009 CTV globemedia Publishing Inc. All Rights Reserved.
globeandmail.com and The Globe and Mail are divisions of CTV globemedia Publishing Inc., 444
Front St. W., Toronto, ON Canada M5V 2S9
Phillip Crawley, Publisher

http://www.theglobeandmail.com/servlet/story/LAC.20090114.LAWCOLUMN14/TPSto... 2009-01-14

000077

Order/Commande

Canada

The Globe and Mail (Metro Ed, ON)


Date

14.01.2009

Circ.

143372

Page

82838
1!2

88

ECONOMIC PROTEGIONISM

Chapter 11 for Abitibi? No, the other Chapter 11


Will use a section of NAFTA to fight Newfoundland's bid to expropriate the company's local power and timber rights

JACQUIE McNISH
: : : ..
;mcmsh@globeandmali.com
hen the United States
pushed in 1994 to insert an investment-protection mechanism in NAFTA,
it wanted insurance against the
expropriating tendencies of
Mexico the tree-trade pact's
new m~mber.
No one could have imagined
then that the rules known as
Chapter 11., would ~ne day be
used by fue United States to try
to smack down Newfoundland
and Labrador. But that is the
precisely the legal club that
AbitibiBowater Inc. is threatening to wield if the province
and its combative Premier
Danny Williams do not b~ck
down from a br~zen bill passed
last month to expropriate the
company's local timber and
power rights in Newfoundland.
"It shocks common sensibility," AbitibiBowater's chief executive officer, David Paterson,
fumed after the legislation was
unveiled. Numerous critics
have likened Mr. Williams to
Venezuela's feverishly populist
leader Hugo Chavez.

While "Chavez of the North"


makes for good headlines, the
hue and cry ignores the legal
heft behind Mr. Williams' hardball play. Canada's protections
against expropriation of property or economic rights are
weaker than those in the U.S.
Constitution. Furthermore, the
handful of U.S.-companies that
have challenged Canadian govemment seizures or businessdestroying regulations under
Chapter 11 of the North American free-trade agreement have
had mixed results.
. The chapter sets out procedures for resolving disputes
over legal rights and compensation involved in exproprlations.
What makes the Newfoundland standoff intriguing is how
Chapter 11 disputes must bear-

gued. Who is required to defend Newfoundland under this


system? The answer is funnier
than Newfoundland's kiss-thecod ritual: fue federal government. A~~ the ~tepheJ?- Harpe! ~dministration, which Mr.
~illiams h~~ raged should be
~ossed o~t over broken election pronuses.
"It is a win-win scenario for
Williams," saidTodd Weiler, a
University of Western Ontario
professor and consultant who
specializes in investment treaty
arbitration under NAFTA.
"Williams can blame the federal government i~ fails to defend the expropnation
legislation. But if the defe?ce
works, he gets to make nuschief against Ottawa by putting
it in the position of supporting

!f

expropriation."
h
li
T e po tically treacherous Iegal scenario means the stakes
will be high for lawyers tapped
to argue the case if it moves to
arbitration. Typically, the federal government's respected director-general of the Trade Law
Bureau, Meg Kinnear, would be
expected to quarterback such a
big case. But sources say the
lawyer, who declined to cornment, is planning an imminent
career move. Finding a willing
trade lawyer to fill her shoes
and take on the politically
fraught case won't be easy.
Across the table, AbitibiBowater is lining up some hefty
legal firepower. A spokesman
declined to comment, but it is
understood that the forest
products company has hired an
undisclosed U.S.law firm with
international trade expertise.
The company is typically advised in Canada by Ogilvy Renault
LLP and Torys LLP, but it is unclear whether local counsel has
been retained.
AbitibiBowater must wait six
months before it is eligible to
challenge Newfoundland under Chapter 11. Until then, the

two sides can be expected to


explore whether a settlement
can be reached without arbitration.
At the heart of settlement or
arbitration negotiations will be
a debate over how mu~h Newfoun~and sho~.d pay m campen~a??n for se1~ng
AbltlbiBowater s power and
timber rights after the province
threw down the gauntlet by offering nothing. The province
insists that it owes AbitibiBowater nofuing because fue
company broke its proinise to
use local timber and hydro
power to fuel its newsprint mill
and the local economy.
When AbitibiBowater ~nounced last month that 1t
planned to close the mill and
lay off_h~dreds of employees,
Mr. Williams stormed that the
company had "reneged on the
bargain" struck a century earlier. AbitibiBowater didn't help
its case locally by saying after
the mill closing announcement
that it planned to sell the tim
ber and hydro assets to reduce
debt. That handed the Preinier
of a province hypersensitive to
the exploitation of its resources
political support for protectionist retaliation.
And maybe, just maybe,
creeping protectionism is the
subplot here. Government intervention and economic protectionism is surging around
the globe as states rush to
shore up domestic businesses
hobbled by fue deepening recession. Whether it's Latin
American countries expropriating foreign mining and petroleum assets or the United
States injecting billions of dollars to give struggling financial
or auto companies an edge,
protectionism is on the rise.
The curious fuing about Mr.
Williams, however, is that he
has chosen to play the protectionist card in support of a critically ill plant. Even if the
province successfully reclaims

UNLICENSED REPRODUCTION PROHIBITED I REPRODUCTION INTERDITE SANS PERMIS

8174

68c2a3

000078

Order/Commande

Canada

The Globe and Mail (Metro Ed, ON)


Date

14.01.2009

the timber and hydro assets,


it's doubtful the victory would
breathe any life into the outmoded operation. In the current credit drought, a new
partner seems unlikely.
Perhaps this is the Canadian
way with expropriations. In
1970, another firebrand, Que-

Circ.

bee premier Rene Levesque,


passed a law to take control of
Asbestos Corp. The province .
wound up owning a business
that was soon overwhelmed by
a wave of asbestos class-action
lawsuits. On top of that, the
company was entangled for
more than a decade in lawsuits

UNLICENSED REPRODUCTION PROHIBITED I REPRODUCTION INTERDITE SANS PERMIS

143372

Page

82838
88

2!2

from investors claiming their


investments had been savaged
by the expropriation.
In countries with developed
legal systems, the legacy of expropriation can be years of 1egal headaches.

8174

68c2a3

000079

5.15(1)
Van5tone, Melanie

5.21 (1 )(b)

From:
To: Mondy, Yannick -WSHDC -TO
Cc: Kallmer, Jonathan
Sent: Fri Jan 09 12:19:58 2009
Subject: RE: happy new year ..

5.19(1)

Hi Yannick

I just left you a voicemail as well.

5.15(1)

If could give me a ring that would be great!

Thanks,

5.19(1)

000080

From: Yannick.Mondy@international.gc.ca [mailto:Yannick.Mondy@international.gc.ca]


Sent: Thursday, January 08, 2009 2:23 PM
To:
Subject: RE: happy new year ..

5.19(1)
: thanks for the clarification. News reports mention a US Govt statement
re1easea ln December and I was wondering if you recall seeing anything that a reporter
could call a "US statement". I don't recall seeing one

look forward to meeting Gina, assuming I don't get crushed on a sidewalk by the
anticipated human tidal wave on inauguration day.

Yannick

5.19(1)
From:
[mailto:
Sent: Januarv 8, 2009 2:17 PM
To:
Mondy, Yannick -WSHDC -TO
Subject: RE: happy new year ..
Happy New Year Yannick -

5.15(1)

Thanks,

5.19(1)

From:
Sent: Thursday, January 08, 2009 1:17 PM
To: 'Yannick.Mondy@international.gc.ca'
Cc: ~
Subject: RE: happy new year ..

Hi Yannick - Happy New Year!


2

000081

5.15(1)
From: Yannick.Mondy@international.gc.ca [mailto:Yannick.Mondy@international.gc.ca]
Sent: Thursday, January 08, 2009 12:19 PM
To:
Subject: happy new year ..
5.19(1)

Hi

I hope all is well. I saw a (Canadian) news report on State Dept demarches with
Newfounland govt re Abiti issue. Do you know anyhting about this, and what the key
messages were?

Best,
Yannick

000082

Page l of9

Vanstone, Melanie
From:

Vanstone, Mefanie

Sent:

January 15, 2009 3:37 PM

To:

Flowers, William; Bordeleau, Annik

Subject:

FW: Official Transcript: CBC R 1The Current-Paterson, pres Abitibi-Bowater

Attachments: 1501doc3, CBC R1The Current-Paterson, pres Abitibi-Bowater.doc


Will be of interest to you - he talks broadly about Abitibi's business in Canada

From: Media Centre, Centre des medias

Sent: Thursday, January 15, 2009 3:02 PM


To: Laporte, Johanna; Vanstone, Melanie; Gilbert, Anne
Cc: Massabki, Myriam; Mukherjee, Mistu
Subject:

2010-11-22

s.21 (1 )(b)

s.68(a)

000083

Pages 84 to I

a 91

are withheld pursuant to section


sont retenues en vertu de l'article

68(a)

of the Access to Information Act


de la Acces

a l'information

Page 1 of2

Message

Vanstone, Melanie
From:

Paquette, Jacques

Sent:

January 15, 2009 7:56 PM

To:

Vanstone, Melanie

Subject:

FW: Meeting Report

Importance: High

-----Original Message----From: Robert. Ready@international.gc.ca [mailto: Robert. Ready@international.gc.ca]


Sent: Thursday, January 15, 2009 11:07 AM
To: Maille, Marie Anick
Cc: MacLeod, Alfred; Paquette, Jacques; Don.Stephenson@international.gc.ca
Subject: Meeting Report
Importance: High
Marie Anick: here is a very quick report on my meeting this morning with representatives of
AbitibiBowater. I hope this is helpful vis a vis your meeting later today.

s.19(1)
On January 15, TBI/Ready and TBI/Bernier met with AbitibiBowater representatives

to discuss the action taken by the Newfoundland and Labrador government to


expropriate AbitibiBowater's assets in Newfoundland.
Both sides of the discussion noted that there was some awkwardness in the context of the
meeting ... discussing a provincial action for which the federal government and the company may well find
themselves in litigtion. Ready noted that at this stage the federal government was largely in listening
mode and seeking facts with respect to the circumstances leading to the expropriation legislation and the
developments since then.
AbitibiBowater indicated that they were taken by surprise by the actions of the NLFD government as they
had been in formal and informal discussions with respect to the disposal of the assets in Newfoundland.
The day AbitibiBowater announced its closure of a number of mils in Canada, including the Grand Falls
mills,
had a discussion
to propose to sit-down and discuss how to
dispose of the assets. Apparently,
and later
accepted AbitibiBowater's
proposal, but the meeting never occured. AbitibiBowater also mentioned that 6 months prior to the
announcement, AbitibiBowater, upon the
request, held discussions with Newfoundland Hydro
to discuss the purchase of some assets. Since the offer was too low, AbitibiBowater refused the offer.
AbitibiBowater stated that it has official documents and correspondence from the province of NFLD that
recognized the value in some rights owned by AbitibiBowater, that are now being seized without
compensation.
The company indicated that there have not yet been compensation discusions with NFLD. While they
are still open to having a working group established to discuss the issue, they emphasize that the terms
of reference for the discussion must be that the discussions cover ALL AbitibiBowater's assets in NFLD.
The company wants to leave NFLD, but wants to ensure it is compensated fully and fairly. The company
floated the idea that if NFLD is not prepared for a full discussion of compensation, or if the discussions
are not conclusive, they would turn to the federal government to try to reach a deal. While the company
did not elaborate, the suggestion seemed to be that the federal government could either pay the total
compensation amount and then seek restitution from NFLD, or the federal government could help
mediate compensation discussions and perhaps "top up" any provincial shortfall.

2010-10-28

000092

Message

Page 2 of2

TBI/Ready made it clear that the federal government will be happy meet with the company at any time
(but that filing of an NOI would make this more difficult given the implications of litigation), but did not
comment one way or the other with respect to any federal involvement in a possible settlement.
AbitibiBowater emphasized that they value their positive relationship with the Government of Canada and
would prefer to avoid any litigation against the federal government. However, they made it clear that no
matter what they will file a "several hundred million dollar" Notice of Intent under NAFTA Chapter 11 in
the next coming weeks, which will include a detailed list of AbitibiBowater's assets in NFLD. They see
the NOI as a vehicle to ensure that the province, the federal government and the public better
understands the investments that the company has made in the province.
The company indicated it would stay in touch with the department.

Robert Ready
Director 1 Directeur
Investment Trade Policy Division 1 Direction de la politique commerciale de l'investissement
Foreign Affairs and International Trade Canada 1 Affaires etrangeres et commerce international Canada
'21 613.944.24271 [f'l 613.762.6591 1181 robert.ready@international.gc.ca

From: Maille, Marie Anick [mailto:MarieAnick.Maille@pco-bcp.gc.ca]


Sent: January 15, 2009 10:56 AM
To: Ready, Robert -TBI
Cc: Macleod, Alfred

Subject: My coordinates ...


Mr. Ready,
Many thanks for your debrief on the meeting this morning. lt was very helpful and your notes will be very
appreciated on our end to prep for this afternoon. I will also debrief you on how it went later on today or
tomorrow if you wish.
Your will find my coordinates below. I will take care of forwarding your information to relevant
people within Intergovernmental Affairs (essentially, Alfred Macleod, ADM IGA Policy & planning; Anne
Gilbert, senior analyst on the provincial file; David A. MacDonald, our senior advisor for international
analysis).
Encore une fois, un grand merci pour votre aide.
Marie Anick Maille
Senior Policy Advisor and Executive Assistant to the ADM I
Conseillere principale de politiques et Adjointe executive du SMA
Intergovernmental Affairs I Affaires intergouvernementales
Privy Council Office I Bureau du Conseif Prive
Tel: 613.992.5489

2010-10-28

000093

Page 1 of2

Message

Gilbert, Anne
From:

Vanstone, Melanie

Sent:

January 15, 2009 9:28 AM

To:

Gilbert, Anne

Subject:

FW: AbitibiBowater

Importance:

High

Attachments:

Melanie Vanstone
!JJV9..0.JQ.o.~.@.pe.Q::P.Q.P.,.9.Q.,_Qfl

613-957-5447
-----Original Message----From: Paquette, Jacques
Sent: Wednesday, January 14, 2009 6:44PM
To: Vanstone, Melanie
Cc: Diogo, Brigitte
Subject: FW: AbitibiBowater
Importance: High

-----Original Message----From: Robert.Ready@international.gc.ca [mailto:Robert.Ready@international.9c.ca]


Sent: Wednesday, January 14, 2009 6:06PM
To: Paquette, Jacques
Cc: Don.Stephenson@international.gc.ca
Subject: RE: AbitibiBowater
Importance: High

5.21 (1 )(b)

Jacques here are the two documents we promised at the meeting on Monday. Please let me know if you have
comments.
fyi - AbitibiBowater is coming in to see us tomorrow
will provide an update as necessary.

We

Robert Ready
Director 1 Directeur
Investment Trade Policy Division 1 Direction de la politique commerciale de l'investissement
Foreign Affairs and International Trade Canada 1 Affaires etrangeres et commerce international Canada
~ 613.944.2427 11r: 613.762.6591 1~~~ robert.ready@international.gc.ca

From: Ready, Robert -TBI


Sent: January 9, 2009 4:24 PM
To: 'Jacques.Paquette@pco-bcp.gc.ca'
Cc: Berndt, Debra -TPC; Stephenson, Don -TPC; Ready, Robert -TBI

Subject: AbitibiBowater
Importance: High

2010-12-06

000094

Message

Page 2 of2

Jacques, in advance of Monday's meeting, Don Stephenson has asked me to provide you with two one-pagers on
the AbitibiBowater file.
I have attached an "Issues" document as well as a "Timelines" document. I will leave it to you whether you wish
to send these out to participants in advance of the meeting. Please note that Don has not had an opportunity to
review these documents.
I understand that JLT/Meg Kinnear is working on a preliminary assessment document which she will likely refer to
on Monday.

Robert Ready
Director 1 Directeur
Investment Trade Policy Division 1 Direction de la politique commerciale de l'investissement
Foreign Affairs and International Trade Canada 1 Affaires etrangeres et commerce international Canada
~ 613.944.2427 1 ::n 613.762.6591 1 r;;_<J r.o.P..e..rt...r.~9.9Y.@.i.o.t~m.9Jto.o.9.L9G.,.G.9.

2010-12-06

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a 101

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sont retenues en vertu des articles

20(1 )(b), 20(1 )(d)

of the Access to Information Act


de la Acces

a l'information

Vanstone, Melanie
From:
Sent:
To:
Cc:
Subject:

Mondou, lsabelle
January 16, 2009 7:12PM
Paquette, Jacques
Vanstone, Melanie

s.23

Attachments:

Isabelle Mondou
Director, Legal Operations
Directrice, Operations juridiques
Office of the Counsel to the Clerk of the Privy Council Bureau du Conseiller juridique
aupres du greffier du Conseil prive
613- 957-5450

000102

1+1

Department of
Justice
Canada

Ministere de la Justice
Canada

Atlantic Regional
Office

Bureau regional de
'Atlantique

Security classification -- Cote de


securite Protected B
File number-- Numero de dossier

CONFIDENTIAL

Date: January 16, 2009

MEMORANDUM I NOTE DE SERVICE

Telephone I FAX-- Telephone I


Telecopieur (902) 426-6995/ (902)
426-2329

5.23

TO I DEST:

lsabelle Mondou, Director, Legal Operations


Office of the Counsel to the Clerk of the Privy Council

FROM/ORIG:

M. Kathleen McManus, Senior Counsel, Civil Litigation & Advisory


Services
John Ashley, Senior Counsel, Tax Law Services
Nicole Arsenault, Counsel, Civil Litigation & Advisory Services

SUBJECT I OBJET:

Abitibi-Consolidated Rights and Assets Act, SNL 2008, c. A-1.01.

000103

Pages 104 to I

a 109

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sont retenues en vertu de l'article

23
of the Access to Information Act
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Page 1 of 1

Message

Gilbert, Anne
From:

MacDonald, David Alexandre

Sent:

January 16, 2009 5:42 PM

To:

Gilbert, Anne; Vanstone, Melanie

Cc:

Smith, Robert

Subject: AbitibiBowater questions

Anne/Melanie:
Some legal related questions have come up within our shop, which are pasted below. Rather than sending them
off as they come up, could you kindly review and add to them as you see fit, and finally relay them to your contact
within DFAIT (Robert Ready I believe)

Have a good weekend.


David

5.21 (1 )(b)
5.23

2010-12-06

000110

5.14
5.15(1)
5.21 (1 )(b)
Abitibi Bowater Timelines

Activity to Date

Dec 4, 2008

AbitibiBowater (AB) announces closure of newsprint plant in


Grand Falls-Windsor to take place in March 2009

Dec 16,2008

re:
Call to DFAIT from
NAFTA Implications
Legislation regarding Abitibi-Bowater passed in Nfld/Lab House
of Assembly
-----

--

000111

s.15(1)
- 2-

Dec23
January 15,
2009

Future Events/Possible NAFTA Timelines

January
2009

28,

February
23,
2009
March
10-11'
2009
March
17-18,
2009
March/April
2009 (tbc)
Spring 2009

June 2009

000112

Page 1 of 1

Message

Gilbert, Anne
From:

MacDonald, David Alexandre

Sent:

January 16, 2009 1:57 PM

To:

Gilbert, Anne

Subject: RE: Draft Note

DA

5.14
5.21 (1 )(b)
-----Original Message----From: Gilbert, Anne
Sent: January 16, 2009 11:18 AM
To: MacDonald, David Alexandre
Subject: Draft Note
David, attached is the draft note I'm preparing for JK. The note provides a general update on the file along
with the meeting summary. Let me know if you have any comments/additions.
An ne

2009-01-16

000113

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21 (1 )(b), 21 (1 )(c)

of the Access to Information Act


de la Acces

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Page 1 of 1

Message

Smith, Robert
From:

MacDonald, David Alexandre

Sent:

January 16, 2009 2:31 PM

To:

Smith, Robert

Subject:

FW: AbitibiBowater

Importance:

High

Attachments: I

Robert:
These does will help.
-----Original Message----From: Gilbert, Anne
Sent: January 15, 2009 3:01 PM
To: MacDonald, David Alexandre
Subject: FW: AbitibiBowater
Importance: High

s.21 (1 )(b)

David, a bit more reading material- attached are documents from DFAIT

An ne

2010-12-10

000119

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14, 15(1 ), 21 (1 )(a), 21 (1 )(b), 23

of the Access to Information Act


de la Acces

a l'information

Vanstone, Melanie
From:
Sent:

To:
Subject:

Mondou, lsabelle
January 19, 2009 9:09AM
Vanstone, Melanie
RE: Abitibi Bowater

Isabelle Mondou
Director, Legal Operations
Directrice, Operations juridiques
Office of the Counsel to the Clerk of the Privy Council Bureau du Conseiller juridique
aupres du greffier du Conseil prive
613- 957-5450

-----Original Message----From: Vanstone, Melanie


Sent: Monday, January 19, 2009 9:07 AM
To: Mondou, Isabelle
Subject: RE: Abitibi Bowater
Hi Isabelle,

Melanie Vanstone
mvanstone@pco-bcp.gc.ca
613-957-5447
-----Original Message----From: Mondou, Isabelle
Sent: Friday, January 16, 2009 7:12 PM
To: Paquette, Jacques
Cc: Vanstone, Melanie
Subject: FW: Abitibi Bowater
Jacques,

Isabelle Mondou
Director, Legal Operations
Directrice, Operations juridiques
Office of the Counsel to the Clerk of the Privy Council
Bureau du Conseiller juridique aupres du greffier du Conseil prive
613- 957-5450

5.23
1

000122

Page 1 of2

Message

Vanstone, Melanie
From:

Robert. Ready@international.gc.ca

Sent:

January 19, 2009 2:04 PM

To:

Vanstone, Melanie

Subject:

RE: NOI

Importance:

High

Attachments: AbitibiBowater Timelines PCO (January 19 2009).DOC


Here you go.

From: Vanstone, Melanie [mailto: Melanie. Vanstone@pco-bcp.gc.ca]


Sent: January 19, 2009 1:26 PM
To: Ready, Robert -ANA
Subject: RE: NOI
Hi Robert,
Will you be updating the timelines document to reflect this update? PCO would be interested in having the new
timelines - today if possible.
Also, I've got a few other random questions- will just call you about these later today.
Thanks

Melanie Vanstone
mvanstone@pco-bcp.gc.ca

613-957-544 7
-----Original Message----From: Robert. Ready@international.gc.ca [mailto: Robert.Ready@international.gc.ca]
Sent: Friday, January 16, 2009 4:54PM
To: Vanstone, Melanie
Subject: RE: NOI
Importance: High

s.23

Hi, on the Notice of Intent (NOI) timing question ..

s.21 (1 )(b)
An NOI can be filed anytime ... but the NOA can't be filed for 90 days after the NOI.
The point I made to the company, and what we should all be emphasizing to them, is that the filing of an NOI will
have dramatic implications for the kind of conversation thev can have with the federal government.

I will send you another report we have in from Rome today on the Italian company EN EL.
Rob

From: Vanstone, Melanie [mailto:Melanie.Vanstone@pco-bcp.gc.ca]

2010-10-28

000123

Message

Page 2 of2

Sent: January 16, 2009 4:26 PM


To: Ready, Robert -TBI
Subject: NOI
Hi Rob,

Any other updates from the past 24hrs?

5.21 (1 )(b)
Thx
Melanie Vanstone
Analyst I Analyste
Economic and Regional Development Policy I
Politique du developpement economique et regional
Privy Council Office I Bureau du Conseil prive
85 Sparks Street I 85 rue Sparks
Ottawa, Ontario, K1A OA3
mvanstone@pco-bcp.gc.ca
telephone 1 telephone 613-957-5447
facsimile I telecopieur 613-957-5007
Government of Canada I Gouvernement du Canada

2010-10-28

000124

5.14
5.19(1)
Abitibi Bowater Timelines

5.15(1)
5.21 (1 )(b)
5.20(1 )(b)

Activity to Date

Dec 4, 2008

AbitibiBowater (AB) announces closure of newsprint plant in Grand FallsWindsor to take place in March 2009

Dec 16, 2008

Call to DFAIT from Opposition Party Research Office re: NAFTA


Implications
Legislation regarding Abitibi-Bowater passed in Nfld/Lab House of
Assemblv

000125

5.14
5.15(1)
5.21 (1 )(b)
January 15, 2009

AB representatives in Ottawa for meetings w1th LJI-Atl, 1-'GU {ana otnersn

5.19(1)

Future Events/Possible NAFTA Timelines

September 2009

Appointment of Arbitrators
Both Parties have 90 davs to aoooint their arbitrator.

Spring/Summer
2010
Fall 2010/Winter
2011
Spring/Fall 2011

Written Memorials
Tribunal holds hearings
Arbitral Award

000126

Gilbert, Anne
From:

Sent:
To:
Subject:

Vanstone, Melanie
January 19, 2009 11 :45 AM
Gilbert, Anne
FW: Abitibi Bowater

Attachments:

-----Original Message----From: Mondou, Isabelle


Sent: Friday, January 16, 2009 7:12 PM
To: Paquette, Jacques
Cc: Vanstone, Melanie
Subject: FW: Abitibi Bowater
Jacques,

Isabelle Mondou
Director, Legal Operations
Directrice, Operations juridiques
Office of the Counsel to the Clerk of the Privy Council
Bureau du Conseiller juridique aupres du greffier du Conseil prive
613- 957-5450

5.23

000127

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21 (1 )(a), 23

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Page 129
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21 (1 )(a), 23

of the Access to Information Act


de la Acces

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21 (1 )(a), 23

of the Access to Information Act


de la Acces

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21 (1 )(a), 23

of the Access to Information Act


de la Acces

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21 (1 )(a), 23

of the Access to Information Act


de la Acces

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of the Access to Information Act


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21 (1 )(a), 23

of the Access to Information Act


de la Acces

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Page 1 of2

Message

Gilbert, Anne
From:

Vanstone, Melanie

Sent:

January 19, 2009 3:45 PM

To:

Gilbert, Anne

Subject:

FW:NOI

Importance:

High

Attachments: AbitibiBowater Timelines PCO (January 19 2009).DOC

Melanie Vanstone
m.Y.<a!J..tQ ne_@Q.C._Q.::.RQP.~g.c._,_g_g_
613-957-544 7
-----Original Message----From: Robert. Ready@international.gc.ca [mailto: Robert. Ready@international.9c.ca]
Sent: Monday, January 19, 2009 2:04PM
To: Vanstone, Melanie
Subject: RE: NOI
Importance: High
Here you go.

From: Vanstone, Melanie [mailto:Melanie.Vanstone@pco-bcp.gc.ca]

Sent: January 19, 2009 1:26PM


To: Ready, Robert -ANA
Subject: RE: NOI
Hi Robert,
Will you be updating the timelines document to reflect this update? PCO would be interested in having the new
timelines- today if possible.
Also, I've got a few other random questions -will just call you about these later today.
Thanks

Melanie Vanstone
m.Y_9.D.$..t.Q.o..e.@pc.Q.::.RC.P..,gQ&;;J.
613-957-5447
-----Original Message----From: Robert.Ready@international.gc.ca [mailto:Robert.Ready@internationai.~JC.ca]
Sent: Friday, January 16, 2009 4:54 PM
To: Vanstone, Melanie
Subject: RE: NOI
Importance: High

5.21 (1 )(b)

Hi, on the Notice of Intent (NOI) timing question ..

2010-12-06

000135

Message

An NOI can be filed anytime ... but the NOA can't be filed for 90 days after the NOI.

Page 2 of2
5.23

The point I made to the company, and what we should all be emphasizing to them, is that the filing of an NOI will
have dramatic implications for the kind of conversation they can have with the f(~deral government.

I will send you another report we have in from Rome today on the Italian company ENEL.
Rob

From: Vanstone, Melanie [mailto:Melanie.Vanstone@pco-bcp.gc.ca]

Sent: January 16, 2009 4:26 PM


To: Ready, Robert -TBI

Subject: NOI
Hi Rob,

5.21 (1 )(b)

Any other updates from the past 24hrs?


Thx
Melanie Vanstone
Analyst I Analyste
Economic and Regional Development Policy I
Politique du developpement economique et regional
Privy Council Office I Bureau du Conseil prive
85 Sparks Street I 85 rue Sparks
Ottawa, Ontario, K1A OA3
mv..a.o.~.to.o..e..@P..GO.:.b.GP..,.9Q.,.c.~a

telephone I telephone 613-957-544 7


facsimile I telecopieur 613-957-5007
Government of Canada I Gouvernement du Canada

2010-12-06

000136

Page 1 of 1

Message

Smith, Robert
From:

MacDonald, David Alexandre

Sent:

January 19, 2009 11 :38 AM

To:

Vanstone, Melanie; Gilbert, Anne

Cc:

Smith, Robert

5.21 (1 )(b)
5.23

Subject:

Anne: is this correct?


-----Original Message----From: Vanstone, Melanie
Sent: January 16, 2009 5:51 PM
To: MacDonald, David Alexandre; Gilbert, Anne
Cc: Smith, Robert
Subject: RE:
Hi David

Melanie Vanstone
mv~nstQn~@PC::9:l:lc::p.gc. ea

613-957-5447
-----Original Message----From: MacDonald, David Alexandre
Sent: Friday, January 16, 2009 5:42 PM
To: Gilbert, Anne; Vanstone, Melanie
Cc: Smith, Robert

Subject:,
Anne/Melanie:

Have a good weekend.


David

2010-12-10

000137

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est retenue en vertu de l'article

14

of the Access to Information Act


de la Acces

a l'information

Page 139
is withheld pursuant to sections
est retenue en vertu des articles

14, 19(1)

of the Access to Information Act


de la Acces

a l'information

01/05/21305

04:52

71397293374

Newfc;>~and
Labrador

NATURAL RESOURCES FR

PAGE

134/05

Government of Newfoundland and Labrador


Department of Natural Resources
Office of the Minister

January 20, 2009

Honourable StockweU Day

Minister of International Trade and Minister


For the Asian. Pacific Gateway
House of Commons
Ottawa, Ontario
KlA OA6

Dear Mr. Day:


On December 16, 2008, the Gove:r.nment of Newfoundland and Labrador pa"lsed

legislation respecting AbitibiBowater Inc. I would appreciate an opportunity to meet


with you to djscuss this legislation, to brief you on the principles and objectives we are
pursuing, and to update you on our discussions wjth affected stakeholders.
I will be in Ottawa during the week of Febrttary S-9, 2009 and would be ava-ilable
to meet with you at yom convenience. Tha.n.k you.

Yours sincerely,

c. Honourable Peter MacKay


HonouTable Lisa Raitt

1'.0. Box 8700. St. Johns. NL canads I\1B 4J6 t 709.729.29.20 f 709.7~9.0059

000140

01/05/2006

04:52

7097293374

PAGE

NATURAL RESOURCES FR

N"ewf~nfdland
Labrador

05/05

Government of Newfoundland and Labrador

Department of Natural Resources

Office of the Minister

January 20, 2009

Honourable Peter MacKay


Minister ofNational Defence and Minister
tor the Atlantic Gateway

Room 509F. Centre Block


House of Commons
Ottawa, Ontario

K1AOA6
Dear Mr. MacKay:
On December 16, 2008, the Government of Newfoundland and Labrador passed
legislation respecting AbitibiBowater fnc. I would appreciate: an opportunity to meet
with you to discuss this legislation, to brief you 011 the principles and objectives we are
pursuing, and to update you on our discussions with affected stakeholders.
l will be in Ottawa during the week of February 5-9, 2009 and would be available

to meet with you at your convenience. Thank you.


Yours sincerely,

c. Honourable Lisa Raitt


Honourable Stockwell Day

P.O. Box 8700, St. John's, NI., Canada A19 4J6 t 709. 7.?.9.:1!920 f 709.729.0059

000141

Pages 142 to I

a 143

are withheld pursuant to sections


sont retenues en vertu des articles

20(1 )(b), 20(1 )(c), 20(1 )(d)

of the Access to Information Act


de la Acces

a l'information

Smith, Robert
From:
Sent:
To:
Subject:

Gilbert, Anne
January 20, 2009 11:35 AM
MacDonald, David Alexandre; Smith, Robert

5.23

FW:.

Attachments:

-----Original Message----From: Vanstone, Melanie


Sent: January 19, 2009 11:45 AM
To: Gilbert, Anne
Subject: FW:

-----Original
From: Mondou,
Sent: Friday,
To: Paquette,
Cc: Vanstone,
Subject: FW:

Message----Isabelle
January 16, 2009 7:12 PM
Jacques
Melanie

Jacques,

Isabelle Mondou
Director, Legal Operations
Directrice, Operations juridiques
Office of the Counsel to the Clerk of the Privy Council
Bureau du Conseiller juridique aupres du greffier du Conseil prive
613- 957-5450

000144

1+1

Department of
Justice
Canada

Ministere de la Justice
Canada

Atlantic Regional
Office

Bureau regional de
'Atlantique

Security classification -- Cote de


securite Protected B
File number-- Numero de dossier

CONFIDENTIAL

Date: January 16, 2009

MEMORANDUM I NOTE DE SERVICE

Telephone I FAX-- Telephone I


Telecopieur (902) 426-69951 (902)
426-2329

TO I DEST:

lsabelle Mondou, Director, Legal Operations


Office of the Counsel to the Clerk of the Privy Council

FROMIORIG:

M. Kathleen McManus, Senior Counsel, Civil Litigation & Advisory


Services
John Ashley, Senior Counsel, Tax Law Services
Nicole Arsenault, Counsel, Civil Litigation & Advisory Services

s.23

SUBJECT I OBJET:

Abitibi-Consolidated Rights and Assets Act, SNL 2008, c. A-1.01.

000145

Pages 146 to I

a 151

are withheld pursuant to section


sont retenues en vertu de l'article

23
of the Access to Information Act
de la Acces

a l'information

Gilbert, Anne
From:
Sent:
To:
Subject:

Vanstone, Melanie
January 21, 2009 11 :32 AM
Gilbert, Anne
FW: AbitibiBowater

Here's info from Rob Ready on discussions between AB and NL.


(Sorry I didn't forward yesterday - for some reason I thought you were on distribution see now that it was just me)
-----Original Message----From: IMCEAX400-c=CA+3Ba=govmt+2Ecanada+3Bp=gc+2Bdfait+2Emaeci+3Bs=Ready+3Bg=Robert+
3Bx400.pco [mailto:IMCEAX400-c=CA+3Ba=govmt+2Ecanada+3Bp=gc+2Bdfait+2Emaeci+3Bs=Ready+
3Bg=Robert+3Bx400.pco]
Sent: Tuesday, January 20, 2009 10:29 AM
To: IMCEAX400-c=CA+3Ba=govmt+2Ecanada+3Bp=gc+2Bdfait+2Emaeci+3Bs=Tabet+3Bg=Sylvie+3Bi=T+
3Bx400.pco; Vanstone, Melanie
Cc: IMCEAX400-c=CA+3Ba=govmt+2Ecanada+3Bp=gc+2Bdfait+2Emaeci+3Bs=Kinnear+3Bg=Meg+
3Bx400.pco; IMCEAX400-c=CA+3Ba=govmt+2Ecanada+3Bp=gc+2Bdfait+2Emaeci+3Bs=Robertson+
3Bg=Paul+3Bx400.pco; IMCEAX400-c=CA+3Ba=govmt+2Ecanada+3Bp=gc+2Bdfait+2Emaeci+
3Bs=Stephenson+3Bg=Don+3Bx400.pco; IMCEAX400-c=CA+3Ba=govmt+2Ecanada+3Bp=gc+2Bdfait+
2Emaeci+3Bs=Bernier+3Bg=Cynthia+3Bx400.pco
Subject: FW: AbitibiBowater
fyi - this just received from AB representative.

From:
[mailto:
Sent: January 20, 2009 10:22 AM
To: Ready, Robert -ANA
Cc: Stephenson, Don -TPC; Robertson, Paul -TPN; Bernier, Cynthia -TBI
Subject: AbitibiBowater

5.19(1)

5.20(1 )(b)
Rob,

000152

5.19(1)

Confidentiality Message
This e-mail is confidential and is intended for the exclusive use of the addressee. Any
other person is stricly prohibited from disclosing, distributing or reproducing it.
If
the addressee cannot be reached or is unknown to you, please inform the sender by return
e-mail immediately and delete this e-mail message and destroy all copies. Thank you.

Avis de confidentialite
Ce message, transmis par courriel, est confidentiel et est l'usage exclusif du
destinataire ci-dessus. Toute autre personne est par les presentes avisee qu'il lui est
strictement interdit de le diffuser, de le distribuer ou le reproduire. Si le
destinataire ne peut etre joint OU VOUS est inconnu, veuillez informer l'expediteur par
courrier electronique imediatement et detruire ce message et toute copie de celui-ci.
Merci.

000153

Page 154
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est retenue en vertu des articles

19(1 ), 20(1 )(b), 20(1 )(c), 20(1 )(d)

of the Access to Information Act


de la Acces

a l'information

Page 1 of3

Message

Vanstone, Melanie
From:

Gilbert, Anne

Sent:

January 22, 2009 8:17 AM

To:

Vanstone, Melanie

Cc:

MacDonald, David Alexandre

Subject:

s.20(1 )(d)

Attachments:
Melanie, see the email below from DFAIT.

s.21 (1 )(b)

Thanks,
An ne
-----Original Message----From: Brian.Parrott@international.gc.ca [mailto:Brian.Parrott@international.gc.ca]
Sent: January 21, 2009 4:22 PM
To: Gilbert, Anne
Subject:

s.20(1 )(d)

An ne;
Sorry I screwed up your e-mail address below.

Brian Parrott
Directeur/Director
Services aux investisseurs/Investor Services
Ph: (613) 944-3159

s.16(2)

Fax: (613) 944-3312

From: Parrott, Brian -IMS

Sent: January 21, 2009 1:41 PM


To: 'agilbert@pch-bcp.gc.ca'
Cc: Ready, Robert -ANA; Bernier, Cynthia -TBI; Ste-Marie, Mario -liP
Subject

s.20(1 )(d)

An ne;

2010-10-28

s.15(1)
s.21 (1 )(b)

000155

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15(1 ), 20(1 )(b), 20(1 )(d)

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de la Acces

a l'information

Page 157
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est retenue en vertu des articles

20(1 )(b), 20(1 )(d)

of the Access to Information Act


de la Acces

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Pages 158 to I

a 159

are withheld pursuant to sections


sont retenues en vertu des articles

15(1 ), 20(1 )(b), 20(1 )(d)

of the Access to Information Act


de la Acces

a l'information

I+I

Government of Canada Gouvernement du Canada


Privy Council Office
Bureau du Conseil prive

lnfoXpress:

To:

CIMS: 2009-IGA-00087
Folder: 682208

411185

Date:

Natasha Rascanin

MEMORANDUM FOR JOHN KNUBLEY I NOTE

JAN 2 3 2009

A L'INTENTION DE JOHN KNUBLEY

Subject:

AGENDA AND POINTS FOR DISCUSSION


FOR THE MEETING ON ABITIBIBOWATER

~
Frorr

VERSIONS:
~raham

Swan

Via:
I

D Information

DYour signature
Votre signature

D For decision

D For comments

Pour decision

Pour commentaires

D Material for the PM


Materiel pour le PM

CONSULTATION:

COMMENTS:
OTHER PCO/
AUTRE BCP

IGNAIG
oSNAS

o SD/DS

XERDP/PDER
o SPR/PSR

oP&P
o LSMP/SLPM
o PCO/BCP - COM
o MOG/AG.
o Leg. Couns./Ops Jur.
o Dem. Ref/Ref Dem
o F & DP/ P. E & D

oCOMMS

OTHER/AUTRE

cc:

DISTRIBUTION :

R. Coleman
A. Macleod
N. Rascanin
K.Campbell
P. Aterman

Drafting Officer: Gil

Central File
FPR Officer
Circ Copy

gl

::ODMA\PCDOCS\PCO_PROD\411205\ 1

5.19(1)

000160

Government of Canada

Gouvernement du Canada

Privy Council Office

Bureau du Conseil prive

Ottawa Canada
~1A OA3

SECRET

JAN 23 2009
MEMORANDUM FOR JOHN KNUBLEY
AGENDA AND POINTS FOR DISCUSSION
FOR THE MEETING ON ABITIBIBOWATER

(Information Only)
SUMMARY
o

You will chair a meeting of Deputies on Monday, January 26, 2009


at 9:30 a.m. on issues related to the expropriation of AbitibiBowater
assets in Newfoundland and Labrador. Attached is a proposed
agenda and discussion points that were prepared in consultation
with ERDP.

Once approved, if you agree, you may want to circulate the agenda
before the meeting.

Natasha Rascanin

5.19(1)

Attachments
Gilbert/gl

Canada

000161

Deputy Ministers' Meeting I Reunion des sous-ministres


January 26, 2009 I 26 janvier 2009
Time 9:30 a.m. - 10:30 a.m., 66 Slater Street, room 925 I
9 h 30 a 10 h 30, 66, rue Slater, piece 925
Expropriation of AbitibiBowater Investments I
Expropriation des actifs d' AbitibiBowater

1.

Background/Current Status and Possible Action Under NAFTA by the


Company and Government of Canada (DFAIT) I Contexte/situation
actuelle et actions possibles de l'entreprise et du gouvernement du
Canada aux termes de I'ALENA (MAECI)

2.

3.

s.14
s.21 (1 )(a)

4.

Other Issues I Autres questions (All I tous)

000162

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Page 1 of1

Message

Jr Bhinder, Kiran
From:

Mondou, lsabelle

Sent:

February 2, 2009 5:07 PM

To:

Smith, Robert

Cc:

Shuttle, Paul

Subject:

5.23

lsabelle Mondou
Director, Legal Operations
Directrice, Operations juridiques
Office of the Counsel to the Clerk of the Privy Council
Bureau du Conseiller juridique aupres du greffier du Conseil prive
613-957-5450

-----Original Message----From: Smith, Robert


Sent: Monday, February 02, 2009 3:27PM
To: Mondou. Isabelle
Subject:.

5.23

Hi lsabelle, we have been asked to write a memo for the IGA OM on options that the federal government
Perhaps we could work with someone on your
team in developing our advice on this matter? thanks

5.14
Robert

5.21 (1 )(b)

2009-02-11

000176

Page 1 of 1

Message

Gilbert, Anne
From:

Brault, lsabelle on behalf of Knubley, John

Sent:

February 3, 2009 8:04 AM

To:

Gilbert, Anne; Knubley, John

Cc:

Rascanin, Natasha; Swan, Graham; White, Betinda

Subject: RE: PRINTED- Meetings with NL Minister Dunderdale


Thanks, Anne.
Please make sure Economic and relevant departments are aware.
John
-----Original Message----From: Gilbert, Anne
Sent: February 2, 2009 5:55 PM
To: Knubley, John
Cc: Brault, Isabelle; Rascanin, Natasha; Swan, Graham; White, Belinda
Subject: PRINTED - Meetings with

5.19(1)

John,
has requested to meet with Ministers Raitt, Day and MacKay while she is in Ottawa
between February 5-9. The meeting with Minister Raitt is confirmed for February 9th. The agenda for this
meeting includes AbitibiBowater (to brief Minister Raitt on the principles and objectives of the issue as well
as provincial discussions with affected stakeholders) as well as other issues-

Minister Day has also confirmed he will meet with


Nho requested the meeting for the
purpose of discussing AbitibiBowater. I am still confirming the date. I am still seeking confirmation of
whether Minister MacKay will meet with her. Will undertake to get back to you as soon as I confirm.

An ne

5.14

2009-02-03

000177

Page 1 of 1

Privy Council Office -C4R


From:

Mckay, Laurie -TBI -C5 [Laurie.Mckay@c.international.gc.ca]

Sent:

February 3, 2009 12:17 PM

To:

Privy Council Office -C4R; EXTOTT (TBI C5); Ready, Robert -ANA -C5

Cc:

IM Repository I Repertoire de Gl; MacKay, Vernon -TBI -C5; Bernier, Cynthia -TBI-

Subject: URGENT Ref: Abitibi Bowater Meeting Note


Security/Stkurite: SECRET/ SECRET

URGENT
SECRET
As requested please find attached, the Abitibi Bowater meeting note.

Please deliver to:


Melanie Vanstone and Anne Gilbert

5.21 (1 )(b)

Regards,
Laurie McKay 996-3324 I for Vernon MacKay

2/03/09

000178

Forefgn Affairs and


International Trade Canada

1+1

Affaires etrangeres et
Commerce international Canada

SECRET

BPTS Number: 00268-2009

5.14
5.19(1)

MEETING NOTE
FOR:

The Minister of International Trade

EVENT:

Meeting with

DATE AND TIME:

February 9, 2009, at 16:30

LOCATION:

Hill office

ISSUE:

Newfoundland and Labrador and AbitibiBowater Inc.

MEETING CONTEXT:

The Government of Newfoundland and Labrador passed legislation in


December 2008 to expropriate assets of AbitibiBowater in the province .

DESIRED OUTCOMES OF THE MEETING:

5.14
The main goals for this meeting are to:

5.19(1)

1.

2.

5.15(1)

3.

4.

Canada

000179

- 2-

SECRET

BACKGROUND:

On December 16, 2008, the Government of Newfoundland and Labrador (NFLD)


passed legislation expropriating AbitibiBowater operations in the province. The action
has been justified
as a result of decisions by the company
to cease operations of its mill (Grand-Falls Windsor) in Newfoundland and Labrador in
March 2009. The Act has also had an impact on the investment of another foreign
company, ENEL, a major energy company in Italy, as the government seized rights of
AbitibiBowater's joint-venture, Star Lake Hydro Partnership.
AbitibiBowater indicated that they were taken by surprise by the actions of the
Newfoundland government as they had been in formal and informal discussions with
respect to the disposal of their assets in Newfoundland. The company has indicated it
is considering its legal options, including those related to taking Canada to international
arbitration under the NAFTA. Although AbitibiBowater has emphasized, in a number of
occasions, that it values its positive relationship with the Government of Canada and
would rather avoid any litigation against the federal government, we should expect
receiving a "several hundred million dollar" Notice of Intent (NOI) under NAFTA Chapter
11 in the coming weeks. In addition to demonstrating its resolve to protect its rights
under the NAFTA, the company sees the NOI as a vehicle to ensure that the province,
the federal government and the public better understands the investments that the
company has made in the province.
5.15(1)
The Government of Canada was not consulted by NFLD on this matter and has limited 5 19( 1)
information at present on this issue. No information has been provided
the NFLD government directly. The only information we have is
Premier William's statement to the legislature, media reports, reports of the discussions
between
as
well as reported discussions between AbitibiBowater and the province.
On January 15, the Department of Foreign Affairs and International Trade (DFAIT) met
with AB representatives. DFAIT noted that at this stage the federal government was
largely in listening mode and seeking facts with respect to the circumstances leading to
the expropriation and the developments since then. The same day,
spoke with ENEL North America to get an update on their investment in
NFLD. Despite
interventions, including
aimed at getting
answers for ENEL from seniorNFLD officials, ENEL was clearly disappointed with the
situation and indicated they would like to meet with senior officials in Canada to discuss
further (currently being organised).
Regardless of the legal merits of the Newfoundland and Labrador action, there are
other major concerns over the potential damage to Canada's and other provinces'
reputation as a place to do business.

000180

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est retenue en vertu des articles

14, 15(1 ), 21 (1 )(b)

of the Access to Information Act


de la Acces

a l'information

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14, 15(1 ), 21 (1 )(b), 23

of the Access to Information Act


de la Acces

a l'information

Page 183
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14, 15(1 ), 21 (1 )(b)

of the Access to Information Act


de la Acces

a l'information

Page 184
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19(1)

of the Access to Information Act


de la Acces

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Page 185
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14, 15(1 ), 21 (1 )(b)

of the Access to Information Act


de la Acces

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Page 1 of3

Message

Gilbert, Anne
From:

Paul Parsons [Paui.Parsons@acoa-apeca.gc.ca]

Sent:

December 19, 2008 10:22 AM

To:

Gilbert, Anne

Subject: RE: Excerpt from NAFTA


Sorry - new version of Word.

Article 1110: Expropriation and Compensation


1.

2.

No Party may directly or indirectly nationalize or expropriate an investment of an investor of another Party in its territory
or take a measure tantamount to nationalization or expropriation of such an investment ("expropriation"), except:
a.

for a public purpose;

b.

on a nondiscriminatory basis;

c.

in accordance with due process of law and Article 11 05(1) ; and

d.

on payment of compensation in accordance with paragraphs 2 through 6.

~~,~.h~!Ll?~~~g,~iva~~-~air ~ket~Ll!e of t~~.:!l?~~l1Y.~~~!P.JE.!.i~~~~~~lx_?_~f0..~~1~~.

expro~ti~:t.l. l~?!J?.l~~'t..Y.("date of expropriation"), an~ sh~ll not r~flect any ~hange m value occumng bec~use th~ mtended

expropnation had become known earlier. ValuatiOn cntena shall mclude gomg concern value, asset value mcluding
declared tax value of tangible property, and other criteria, as appropriate, to detennine fair market value.
3.

Compensation shall be paid without delay and be fully realizable.

4.

If payment is made in a G7 currency, compensation shall include interest at a commercially reasonable rate for that
currency from the date of expropriation until the date of actual payment.

5.

If a Party elects to pay in a currency other than a G7 currency, the amount paid on the date of payment, if converted into a
G7 currency at the market rate of exchange prevailing on that date, shall be no less than if the amount of compensation
owed on the date of expropriation had been converted into that G7 currency at the market rate of exchange prevailing on
that date, and interest had accrued at a commercially reasonable rate for that G7 currency from the date of expropriation
until the date of payment.

6.

On payment, compensation shall be freely transferable as provided in Article 1109.

7.

This Article does not apply to the issuance of compulsory licenses granted in relation to intellectual property rights, or to
the revocation, limitation or creation of intellectual property rights, to the extent that such issuance, revocation, limitation
or creation is consistent with Chapter Seventeen (Intellectual Property).

8.

For purposes of this Article and for greater certainty, a non-discriminatory measure of general application shall not be
considered a measure tantamount to an expropriation of a debt security or loan covered by this Chapter solely on the
ground that the measure imposes costs on the debtor that cause it to default on the debt.

Article 1105: Minimum Standard of Treatment


1.

Each Party shall accord to investments of investors of another Party treatment in accordance with international law,
including fair and equitable treatment and full protection and security.

2008-12-19

000186

5.16(2)

Privy Council Office -C4R


From:

Mckay, Laurie -TBI.

Sent:

February 4, 2009 10:17 AM

To:

Privy Council Office -C4R; EXTOTT (TBI C5)

Cc:

IM Repository I Repertoire de Gl; Ready, Robert -ANA -C5; MacKay, Vemon -TBI-C5;
Bernier, Cynthia-TBI -C5

Subject:

URGENT: Meeting with

DFAITCaveat:

5.19(1)

Re: Abibiti Bowater

DFAITCiassification: 1
DFAITDefaultCCSet: 1
Security/Stkurite: SECRET/ SECRET
SECRET
URGENT
PCO: Please pass to Melanie Vanstone, Graham Swan and Anne Gilbert.

As request please find attached the revised Meeting note Re: Meeting with
( Atbitibi Bowater)

Regards,
Laurie McKay for Vernon MacKay
996-3324

2/04/09

000187

1+1

Foreign Affairs and


lntmnalional Trade Canada

Affaires etrangeres et
Commerce international Canada

SECRET

BACKGROUND NOTE

5.19(1)
ISSUE:

Meeting with
regarding Abitibi Bowater Inc.

BACKGROUND:

On December 16, 2008, the Government of Newfoundland and Labrador (NFLD)


passed legislation expropriating AbitibiBowater operations in the province. The action
has been
a result of decisions by the company
to cease operations of its mill (Grand-Falls Windsor) in Newfoundland and Labrador in
March 2009. The Act has also had an impact on the investment of another foreign
company, ENEL, a major energy company in Italy, as the government seized rights of
AbitibiBowater's joint-venture, Star Lake Hydro Partnership.
AbitibiBowater indicated that they were taken by surprise by the actions of the
Newfoundland government as they had been in formal and informal discussions with
respect to the disposal of their assets in Newfoundland. The company has indicated it
is considering its legal options, including those related to taking Canada to international
arbitration under the NAFTA. Although AbitibiBowater has emphasized, in a number of
occasions, that it values its positive relationship with the Government of Canada and
would rather avoid any litigation against the federal government, we should expect
receiving a "several hundred million dollar" Notice of Intent (NOI) under NAFTA Chapter
11 in the coming weeks. In addition to demonstrating its resolve to protect its rights
under the NAFTA, the company sees the NOI as a vehicle to ensure that the province,
the federal government and the public better understands the investments that the
company has made in the province.
5 .15(1)
The Government of Canada was not consulted by NFLD on this matter and has limited 5 .19(1)
information at present on this issue. No information has been provided by
the NFLD government directly. The only information we have is
Premier William's statement to the legislature, media reports, reports of the discussions
between
_
as
well as reported discussions between AbitibiBowater and the province.
On January '15, the Department of Foreign Affairs and International Trade (DFAIT) met
with AB representatives. DFAIT noted that at this stage the federal government was
largely in listEming mode and seeking facts with respect to the circumstances leading to
the expropriation and the developments since then. The same day,
spoke with ENEL North America to get an update on their investment in
NFLD. Despite
interventions, including
aimed at getting
answers for ENEL from senior NFLD officials, ENEL was clearly disappointed with the
situation and indicated they would like to meet with senior officials in Canada to discuss
further (currently being organised).
met with AbitibiBowater on
January 28, and the meeting focussed on the aftermath of the expropriation, including
AbitibiBowater's attempts to reach out to
AbitibiBowater has also met
with officials from the US Department of Commerce, US Trade Representative and

Canada

000188

5.14
5.15(1)

- 2-

SECRET 5.21 (1 )(b)

Treasury.
Regardless of the legal merits of the Newfoundland and Labrador action, there are
other major concerns over the potential damage to Canada's and other provinces'
reputation as a place to do business.

000189

s.14

,,

5.15(1)
- 3-

s.21 (1 )(b)

SECRET

000190

Page 1 of 1

Message

Gilbert, Anne
From:

Mondou, lsabelle

Sent:

February 4, 2009 9:48 AM

To:

Gilbert, Anne; Vanstone, Melanie

5.23

Subject:

lsabelle Mondou
Director, Legal Operations
Directrice, Operations juridiques
.Office of the Counsel to the Clerk of the Privy Council
Bureau du Conseiller juridique aupres du greffier du Conseil prive
613-957-5450

2010-12-06

000191

Page 1 of4

Message

Swan, Graham
From:

Vernon.MacKay@international.gc.ca

Sent:

February 4, 2009 4:06 PM

To:

Swan, Graham

Cc:

Vanstone, Melanie

Subject: RE: Meetings with

5.19(1)
re AbitibiBowater

Ok, we are sending backgrounder now. The key messages in the backgrounder are for use in meeting with
and are not/not appropriate for NRCan Minister meeting with Abitibi. I will send an e-mail to Edith to that
effect and include the listening mode massaging that we are using in meetings with Abitibi. I will cc you on that
message.

From: Swan, Graham [mailto:Graham.Swan@pco-bcp.gc.ca]

Sent: February 4, 2009 3:56 PM


To: MacKay, Vernon -TBI
Cc: Vanstone, Melanie
Subject: RE: Meetings with

re AbitibiBowater

We do not have one in our building. Melania Vanstone is closer but I can't reach her at the moment and NRCan is
anxious to get something quickly as their Minister is meeting AbitibiBowater representatives tomorrow. The
contact for NRCan is Edith Morber (996-2918, or Edith.Morber@NRCan-RNCan.gc.ca) and at ACOA it is Herb
Davis (Herb.Davis@ACOA-APECA.gc.ca)

Graham Swan
Director Generai/Directeur general
gswan@pco-bcp.gc.ca
Telephone/telephone 613-943-2097
Privy Council Office, 66 Slater Street, Ottawa
Ontario K 1A OA3
Bureau du Conseil prive, 66 rue Slater, Ottawa
Ontario K 1A OA3
Government of Canada/Gouvernement du Canada

-----Original Message----From: Vern on. MacKay@ international.gc.ca [mailto: Vernon. MacKay@international.gc.ca]


Sent: February 4, 2009 3:50PM
To: Swan, Graham
Subject: RE: Meetings with NL Minister Dunderdale re AbitibiBowater
We do have C5 connection to NRCan and ACOA. You do not? We understood that PCO would be sharing
the note with the other departments. However, if you do not have the secure connection we would be
happy to do it. Do you have contacts who should receive the note?

From: Swan, Graham [mailto:Graham.Swan@pco-bcp.gc.ca]

Sent: February 4, 2009 3:34PM


To: MacKay, Vernon -TBI
Subject: RE: Meetings with NL Minister Dunderdale re AbitibiBowater

2009-02-04

000192

Page 2 of4

Message

Got them now. Both the background note and speaking points look fine. Do you have a secure way of
getting copies to NRCan and ACOA?

Graham Swan
Director Generai/Directeur general
gswan@pco-bcp.gc.ca
Telephone/telephone 613-943-2097
Privy Council Office, 66 Slater Street, Ottawa
Ontario K1A OA3
Bureau du Conseil prive, 66 rue Slater, Ottawa
Ontario K 1A OA3
Government of Canada/Gouvernement du Canada

5.19(1)

-----Original Message----From: Vernon. MacKay@international.gc.ca [mail to: Vernon. MacKay@international.gc.ca]


Sent: February 4, 2009 1:55PM
To: Swan, Graham
Cc: Laurie.Mckay@international.gc.ca
Subject: RE: Meetings with
re AbitibiBowater
Graham, They were sent by C5 this morning, around 10:00.
Laurie, which C5 account should Graham check with?
V ern

From: Swan, Graham [mailto:Graham.Swan@pco-bcp.gc.ca]

Sent: February 4, 2009 1:53PM


To: MacKay, Vernon -TBI
Subject: RE: Meetings with

re AbitibiBowater

Vernon: When can I expect to see the abbreviated talking points for Raitt and McKay and the
background breifing note?
Graham Swan
Director Generai/Directeur general
gswan@pco-bcp.gc.ca
Telephone/telephone 613-943-2097
Privy Council Office, 66 Slater Street, Ottawa
Ontario K 1A OA3
Bureau du Conseil prive, 66 rue Slater, Ottawa
Ontario K 1A OA3
Government of Canada/Gouvernement du Canada

-----Original Message----From: Vernon. MacKay@international.gc.ca [mailto: Vern on. MacKay@international.gc.ca]


Sent: February 4, 2009 12:34 PM
To: Vanstone, Melanie
Cc: Swan, Graham; Laurie.Mckay@international.gc.ca

2009-02-04

000193

Message

Page 3 of4
Subject: RE: Meetings with

re AbitibiBowater

5.21 (1 )(b)

Ok, thanks.

From: Vanstone, Melanie [mailto:Meianie.Vanstone@pco-bcp.gc.ca]

Sent: February 4, 2009 12:34 PM


To: MacKay, Vernon -TBI
Cc: Swan, Graham
Subject: RE: Meetings with

5.19(1)
re AbitibiBowater

Hi Vernon
lt seems that we won't have feedback from our brief before the end of today, so I'm no longer
advising that you delay sending the notes to Ministers.
We will advise if we do receive further direction in advance of the meetings with

Thanks

Melanie Vanstone
mvanstone@pco-bcp.gc.ca

613-957-544 7
-----Original Message----From: Vernon.MacKay@international.gc.ca [mailto:Vernon.MacKay@international.gc.ca]
Sent: Wednesday, February 04, 2009 9:25AM
To: Vanstone, Melanie; Swan, Graham
Subject: RE: Meetings with
re AbitibiBowater
Ok, but the meetings with
1 are on Monday, meaning that we need to start
now on getting approvals up the line. 11- revisions come in, we will incorporate in our note.
Thanks.

From: Vanstone, Melanie [mailto:Melanie.Vanstone@pco-bcp.gc.ca]

Sent: February 4, 2009 9:16AM


To: Swan, Graham; MacKay, Vernon -TBI
Subject: RE: Meetings with

re AbitibiBowater

Hi Graham and Vernon,


We are in agreement with that approach, however, we are still asking that the messages not
go all the way to Ministers today i

Thanks
Melanie Vanstone
Analyst I Analysts
Economic and Regional Development Policy I
Politique du developpement economique et regional
Privy Council Office I Bureau du Conseil prive
85 Sparks Street I 85 rue Sparks
Ottawa, Ontario, K1A OA3
mvanstone@pco-bcp.gc.ca

2009-02-04

000194

Message

Page 4 of4
telephone I telephone 613-957-5447
facsimile I telecopieur 613-957-5007
Government of Canada I Gouvernement du Canada

5.19(1)

-----Original Message----From: Swan, Graham


Sent: Wednesday, February 04, 2009 9:12AM
To: 'Vernon.MacKay@international.gc.ca'
Cc: Vanstone, Melanie
Subject: Meetings with
re AbitibiBowater

5.21 (1 )(b)

Vernon:

Could you send me the backgrounder and the short version of the speaking points for
Ministers Raitt and McKay as soon as they are ready. I will ensure they are passed on to the
departments
Graham Swan
Director Generai/Directeur general
gswan@pco-bcp.gc.ca
Telephone/telephone 613-943-2097
Privy Council Office, 66 Slater Street, Ottawa
Ontario K 1A OA3
Bureau du Conseil prive, 66 rue Slater, Ottawa
Ontario K 1A OA3
Government of Canada/Gouvernement du Canada

2009-02-04

000195

Page 1 of 1

Swan, Graham
From:

Vernon.MacKay@international.gc.ca

Sent:

February 4, 2009 5:25 PM

To:

Herb.Davis@ACOA-APECA.gc.ca

Cc:

Swan, Graham

5.19(1)

Subject: Note on Abitibi

Herb,
Graham asked that we send you a background note on Abitibi-Bowater in preparation for Minister Mackay's
meeting with
on Feb. 9. This was sent by secure e-mail to: Atlantic
Opportunities Agency- BH- C5, with instructions to deliver to you. The message was sent at 4:10 this afternoon.
The same note was sent to NRCan for use by Minister Raitt. Minister Day has a similar note. Both of these
as well.
Ministers will be meeting

VernMacKay
A/Director
Investment Trade Policy Division
Department ofForeign Affairs and International Trade
125 Sussex Drive, Ottawa, Ontario, K1A OG2
Tel. (613) 944-1596;/ax (613) 944-0679
vernon.mackay@dfait-maeci.gc.ca

2009-02-04

000196

Message

Page 1 of 4

Neilson, David
From:

Shuttle, Paul

Sent:

February 4, 2009 2:43 PM

To:

Smith, Robert

Cc:

Vanstone, Melanie; Shuttle, Paul; Mondou, lsabelle

Subject:

RE: NAFTA arbitration

Attachments:

Solicitor-Client

2010-11-29

5.23

000197

Page 198
is withheld pursuant to section
est retenue en vertu de l'article

23
of the Access to Information Act
de la Acces

a l'information

Message

Page 3 of4

Paul Shuttle
Assistant Director of Legal Operations
Directeur adjoint des Operations juridiques
Privy Council Office 1Bureau du Conseil prive
90 rue Sparks - piece 806F 1 90 Sparks Street - Room 806F
Ottawa, Ontario, Canada K1A OA3
Telephone 1 Telephone: (613) 957-5777

5.23

2010-11-29

000199

Message

Page 4 of4

Telt9copieur 1Facsimile : (613) 957-5032


pshuttle@pco-bcp.gc.ca
Government of Canada I Gouvernement du Canada
-----Original Message-----

From: Smith, Robert

Sent: February 3, 2009 5:41 PM


To: Shuttle, Paul

Subject:

Robert

5.21 (1 )(b)
5.23

2010-11-29

000200

Pages 201 to I

a 203

are withheld pursuant to sections


sont retenues en vertu des articles

14, 21 (1 )(b), 23

of the Access to Information Act


de la Acces

a l'information

Message

Page 1 of 1

Neilson, David
From:

Smith, Robert

Sent:

February 5, 2009 12:35 PM

To:

'Meg. Kinnear@international.gc.ca'

Cc:

Mondou, lsabelle; Shuttle, Paul

Subject:
Attachments:

Robert F. Smith
Senior Strategic Policy Analyst 1 Analyste principal en politiques strategiques
Constitutional and Legal Affairs 1 Affaires constitutionnelles etjuridiques
Strategic Policy and Research 1 Politiques strategiques et recherche
Intergovernmental Affairs 1 Affaires intergouvernementales
Privy Council Office 1 Bureau du Conseil prive
66 Slater Street, Room 900-B 1 66, rue Slater, piece 900-B
Ottawa, Canada K1A OA3
rsmith@m;o-bcp.gc.ca
Telephone 1 Telephone (613) 947-7009
Facsimile 1 Telecopieur (613) 947-7581
Government of Canada 1 Gouvernement du Canada

5.23

2010-11-29

000204

Pages 205 to I

a 207

are withheld pursuant to sections


sont retenues en vertu des articles

14, 21 (1 )(b), 23

of the Access to Information Act


de la Acces

a l'information

Message

Page 1 of 1

Neilson, David
From:

Meg. Kinnear@international. gc. ea

Sent:

February 5, 2009 12:38 PM

To:

Smith, Robert

Cc:

Mondou, lsabelle; Shuttle, Paul

Subject:
Attachments: abitibi- comments.DOC
Robert.

Meg

From: Smith, Robert [mailto:Robert.Smith@pco-bcp.gc.ca]


Sent: February 5, 2009 12:35 PM
To: Kinnear, Meg -JLT
Cc: Mondou, Isabelle; Shuttle, Paul
Subject:

Robert F. Smith
Senior Strategic Policy Analyst 1 Analyste principal en politiques strategiques
Constitutional and Legal Affairs 1 Affaires constitution ne lies et juridiques
Strategic Policy and Research 1 Politiques strategiques et recherche
Intergovernmental Affairs 1 Affaires intergouvernementales
Privy Council Office 1 Bureau du Conseil prive
66 Slater Street, Room 900-8 1 66, rue Slater, piece 900-8
Ottawa, Canada K1A OA3

DFAIT
recommendations

s.23

rsmith@PGQ:::b~~,Gf:l

Telephone 1 Telephone (613) 947-7009


Facsimile 1 Telecopieur (613) 947-7581
Government of Canada 1 Gouvernement du Canada

2010-11-29

000208

Pages 209 to I

a 212

are withheld pursuant to sections


sont retenues en vertu des articles

14, 21 (1 )(b), 23

of the Access to Information Act


de la Acces

a l'information

Message

Page 1 of 1

Neilson, David
From:

Smith, Robert

Sent:

February 5, 2009 6:13PM

To:

Mondou, lsabelle; Shuttle, Paul

Subject:
Attachments:

Robert

-----Original Message----From: Wright, Laurie [mailto:LWright@JUSTICE.GC.CA]


Sent: February 5, 2009 4:49 PM
To: Smith, Robert

Cc: Kinnear, Meg (DFAIT-JLT); Behboodi, Rambod (FIN); McManus, Kathleen; Freeman, Martin; Clervoix, Magali
Subject: I

Laurie Wright
Deputy Director and General Counsel 1 Directrice adjointe et avocate gimerale
Constitutional and Administrative Law Section

Section du droit administratif et constitutionnel


Department of Justice Canada 1 Ministere de la Justice Canada
284 Wellington Street, Room 3211 1284 rue Wellington, piece 3211
Ottawa (Ontario) K1A OHS
Telephone 1Telephone: 613-941-2317
Facsimile 1Telecopieur: 613-941-1937

5.23

lw:rigbJ@ju~tice .gc~Ga

Government of Canada 1Gouvernement du Canada

2010-11-29

000213

Pages 214 to I

a 217

are withheld pursuant to sections


sont retenues en vertu des articles

14, 21 (1 )(b), 23

of the Access to Information Act


de la Acces

a l'information

Page 1 of 1

Jly'Iessage

Smith, Robert
From:

Wright, Laurie [LWright@JUSTICE.GC.CA]

Sent:

February 5, 2009 4:49PM

To:

Smith, Robert

Cc:

Kinnear, Meg (DFAIT-JLT); Behboodi, Rambod (FIN); McManus, Kathleen; Freeman, Martin;
Clervoix, Magali

Subject: I

Laurie Wright
Deputy Director and General Counsel

1 Directrice

adjointe et avocate generale

5.23

Constitutional and Administrative Law Section 1


Section du droit administratif et constitutionnel
Department of Justice Canada 1 Ministere de la Justice Canada
284 Wellington Street, Room 3211 1 284 rue Wellington, piece 3211
Ottawa (Ontario) K1A OH8
Telephone 1 Telephone: 613-941-2317
Facsimile 1 Telecopieur: 613-941-1937
lwrigbJ@jt,J:,s\ic:&gc.<::
Government of Canada 1 Gouvernement du Canada

2009-02-05

000218

Pages 219 to I

a 221

are withheld pursuant to sections


sont retenues en vertu des articles

14, 21 (1 )(b), 23

of the Access to Information Act


de la Acces

a l'information

Pages 222 to I

a 225

are withheld pursuant to sections


sont retenues en vertu des articles

14, 21 (1 )(b), 23

of the Access to Information Act


de la Acces

a l'information

Page lot J

v__an_s_t_o_ne_,_M_e_l_a_n_e_________________________________________________ s.19(1)
s.20(1 )(b)

From:
Sent:

February 9, 2009 4:19PM

To:

Macleod, Alfred

Cc:

Vanstone, Melanie; Gilbert, Anne

Subject:

AbitibiBowater- press article of interest and update

s.20(1 )(c)
s.20(1 )(d)

Follow Up Flag: Follow up


Flag Status:

Flagged

Bonjour Alfred,

Best regards, .

Newfoundland hurts itself with Abitibi seizure

BILLDYMOND
Globe and Mail
February 6, 2009 at 2:38 PM EST
Newfoundland and Labrador Premier Danny Williams may believe that nationalizing the timber and
hydro power assets of AbitibiBowater Inc. is a win-win situation. The Premier could not be more wrong.
This is a lose-lose situation both for the province and Canada as a whole.
Serious harm has already been done to the province's and Canada's reputation as a secure location for
foreign investment. Urgent action is necessary to remedy the harm by paying prompt and fair
compensation to AbitibiBowater.
On Dec. 16, Premier Williams announced the nationalization of AbitibiBowater's timber and hydro
power assets to take effect in March, when the company ceases pulp and paper operations in the
province. In a single day of debate, the Newfoundland legislature adopted an act authorizing the
nationalization and denying any right to compensation. If any is to be paid, the government will decide
the amount.
Further, the legislation specifically wiped out AbitibiBowater's legal rights. Predictably, AbitibiBowater
vigorously rejected the legislation as a violation of Canada's North American free-trade agreement
obligations.

2010-10-28

000226

Page 2 of3
The central issue at stake in this sorry affair is not Newfoundland's right under NAFTA to nationalize
AbitibiBowater's assets. To be sure, the adoption oflegislation in a single day without affording a
hearing to the company smacks of rough justice indeed, if not a vengeful attitude by the province toward
the company.
The real harm arises from denying any entitlement to compensation and the extinction of
AbitibiBowater's legal rights. NAFTA is quite clear on these issues. Any nationalization must be
conducted in accordance with due process and accompanied by the payment of prompt and adequate
compensation. Due process means at a minimum that the amount of compensation should be assessed by
an independent tribunal and be subject to judicial review. The requirement is designed to deal precisely
with a situation such as the nationalization of AbitibiBowater's property. There can be little doubt that
AbitibiBowater has a compelling NAFTA case.
Under NAFTA, it would be the federal government that would have to defend Newfoundland's action
and the federal government that would be on the hook to pay any damages awarded to AbitibiBowater.
What kind of a defence should Canada make if AbitibiBowater launches a NAFTA challenge? Much as
the denial of legal rights in a country that prides itself as a law-abiding society should outrage any
Canadian, a weak defence would expose all Canadians to significant financial liabilities for no gain.
The first two NAFTA cases brought against Canada involving equally blatant breaches of Canada's
obligations to treat foreign investors fairly were costly. The first case challenged the ban of a gasoline
chemical made by a U.S. company in Canada on patently false environmental grounds and cost the
taxpayers $13-million in an out-of-court settlement. In the second, the arbitrators found that a Canadian
prohibition of hazardous waste exports deliberately discriminated against a U.S. company and awarded
$6-million in damages.
A robust defence would be even worse.
For decades, Canada has worked hard to convince foreign investors that Canada is a reliable place to
invest, governed by the rule of law. Canada is open for business, we claim, and Newfoundland explicitly
says so on its website. Federal and provincial trade missions- often led by premiers- our diplomatic
offices abroad and a vast array of services made available to foreign investors are all intended to
strengthen Canada in the global competition for investment. For many years, Canada has been
aggressively negotiating treaties to protect Canadian investors in other countries from actions of the type
taken by Newfoundland. These treaties replicate the obligations that Newfoundland has now breached.
A vigorous defence of the right to nationalize foreign-owned private property without compensation
while sweeping aside the legal rights of the investor would further damage Canada's reputatiqn. At a
time of a global credit crunch, when investors prize security and stability above all else, this is the
wrong message to send. It would, moreover, say loudly and clearly to our investment treaty partners that
Canada has no intention of living up to the same obligations that we ask of them.
How do we get out of this problem with the least harm? It is not fundamentally about the rights and
wrongs of the nationalization. And a NAFTA case would take years to resolve. The problem is
transparency, fair dealing and the rule of law.
The federal government should urge the government ofNewfoundland and Labrador to engage in
timely, good-faith negotiations of a settlement, including the prospect of third-party mediation. It should
make clear that when every dollar is needed to help the economy out of the recession, going deeper into

2010-10-28

000227

Page 3 of3
deficit to pay for the hasty and ill-considered nationalization of AbitibiBowater property is not on the
federal agenda.
Premier Williams may have convinced himself that he holds the high ground as the courageous defender
of provincial interests. When populism collides with principle, however, principle usually suffers. And
the damage can be long term. Reputations for fair and honest dealing depend critically on adherence to
principle and the most basic elements of justice. Good reputations can be lost overnight and can take
decades to repair. Witness how investment dried up in many developing countries when foreign property
was nationalized and no compensation was paid.
This dispute casts a dark shadow over the bright economic future ofNewfoundland. To exploit its
resource riches and diversify its economy, the province needs investors and investment both within and
outside Newfoundland. Mr. Williams needs to stop acting like the Premier of a "have not" province and
adjust to the new paradigm.
The treatment of AbitibiBowater runs the risk of derailing the rosy economic prospects of
Newfoundland. Common sense and self-interest both call for a fair, expeditious settlement with
AbitibiBowater.
Bill Dymond is senior fellow at the Centre for Trade Policy and Law, Carleton University. He is a
retired Canadian diplomat with extensive experience in the negotiation of international trade and
investment agreements.

5.19(1)

Confidentiality Message
This e-mail is confidential and is intended for the exclusive use of the addressee. Any other person is stricly prohibited from disclosing, distributing or
reproducing it. If the addressee cannot be reached or is unknown to you, please inform the sender by return e-mail immediately and delete this e-mail
message and destroy all copies. Thank you.
Avis de confidentialite
Ce message, transmis par courriel, est confidentiel et est I' usage exclusif du destinataire ci-dessus. Toute autre person ne est par les presentes avisee qu'il
lui est strictement interdit de le diffuser, de le distribuE.r ou le reproduire. Si le destinataire ne peut etre joint ou vous est inconnu, veuillez informer
l'expediteur par courrier electronique imediatement et detruire ce message et toute copie de celui-ci. Merci.

2010-10-28

000228

Page 1 of2

Message

Vanstone, Melanie
From:

Gilbert, Anne

Sent:

February 9, 2009 5:28 PM

To:

Vanstone, Melanie

Subject:

FW: Mtg with AbitibiBowater

Importance: High
See debrief below on NRCan meeting with AB officials.

s.21 (1 )(b)
-----Orig ina I Message----From: Morber, Edith [mailto:Edith.Morber@NRCan-RNCan.gc.ca]
Sent: February 9, 2009 5:09PM
To: Gilbert, Anne
Subject: FW: Mtg with AbitibiBowater
Anne, as discussed. I'll see what more I can get through my ADMO. And apologies for not getting back to you. I
got caught up with other things.
Edith Morber
Director, SPIIERIIGA I Directrice, ISP/RE/AIG
Natural Resources Canada I Ressources naturelles Canada
580 Booth Street, 11th Floor, Room B8-1 I 580, rue Booth, 11e etage, piece B8-1
Ottawa, ON
K1A OE4
996-2918

From:

Rosser, Tom

Sent: February 9, 2009 11:26


To: Morber, Edith
Subject:

RE: Mtg with AbitibiBowater

The meeting was mostly about credit issues- I gather Newfoundland did come up briefly- as per the PCO notes,
the company apparently suggested they might be willing to let NAFTA thing go if assistance was forthcoming on
the credit side. That was about alii heard. Serge Dupont was the only NRCAN official present, I believe.
Regards
Tom Rosser

From:

Morber, Edith

Sent: February 9, 2009 11:18


To: Rosser, Tom
Subject:

Mtg with AbitibiBowater

2010-10-28

000229

Message

Page 2 of2

Hi Tom, just wondering whether you received any kind of debrief from the above. I received a call from PCO
wondering. Thanks.
Edith Morber
Director, SPIIERIIGA I Directrice, ISPIREIAIG
Natural Resources Canada I Ressources naturelles Canada
580 Booth Street, 11th Floor, Room B8-1 /580, rue Booth, 11e etage, piece B8-1

Ottawa, ON

K1A OE4
996-2918

2010-10-28

000230

From: Thompson, Kate

Sent: February 9, 2009 4:38PM


To: Leblanc, Alfred
Cc: Hayes, Duane; Behboodi, Rambod

Subject:

5.23

000231

Kate Thompson
Counsel I Avocate

5.23

General Legal Services Division 1 Division des services juridiques g{meraux


Law Branch 1 Direction juridique
Department of Finance Canada 1 Ministere des Finances Canada
Ottawa, Canada K1A OG5
Kat e. Thompson@fin .gc.ca
Telephone I Telephone 613-947-0724 I Facsimile 1 Telecopieur 613-944-5566 I Teletypewriter 1
Teleimprimeur 613-995-1455

Government of Canada I Gouvemement du Canada

000232

Page 1 of2

Message

Gilbert, Anne
From:

Vanstone, Melanie

Sent:

February 9, 2009 5:30 PM

To:

Gilbert, Anne

Subject: RE: Mtg with AbitibiBowater


Just talking to Rob Ready- he was at the AB Ministers meeting. Will send us his summary

Melanie Vanstone
mvanstone@pco-bcp.gc.ca
613-957-5447
-----Original Message----From: Gilbert, Anne
Sent: Monday, February 09, 2009 5:28PM
To: Vanstone, Melanie
Subject: FW: Mtg with AbitibiBowater
Importance: High
See debrief below on NRCan meeting with AB officials.

5.21 (1 )(b)
-----Original Message----From: Morber, Edith [mailto:Edith.Morber@NRcan-RNCan.gc.ca]
Sent: February 9, 2009 5:09PM
To: Gilbert, Anne
Subject: FW: Mtg with AbitibiBowater
Anne, as discussed. I'll see what more 1can get through my ADMO. And apologies for not getting back to you.
got caught up with other things.
Edith Morber
Director, SP11ERJ1GA I Directrice, 1SP/REIAIG
Natural Resources Canada I Ressources naturelles Canada
580 Booth Street, 11th Floor, Room B8-1 I 580, rue Booth, 11 e etage, piece B8-1
Ottawa, ON
K1A OE4
996-2918

From:

Rosser, Tom

Sent:

February 9, 2009 11:26

To:

Morber, Edith

Subject:

RE: Mtg with AbitibiBowater

The meeting was mostly about credit issues- 1gather Newfoundland did come up briefly- as per the PCO notes,
the company apparently suggested they might be willing to let NAFTA thing go if assistan~e was forthcoming on
the credit side. That was about all I heard. Serge Dupont was the only NRCAN official present, I believe.

2010-12-06

000233

Page 2 of2

Message
Regards
Tom Rosser

From:

Morber1 Edith

Sent: February 9 2009 11:18


1

To:

Rosser 1 Tom

Subject:

Mtg with AbitibiBowater

Hi Tom, just wondering whether you received any kind of debrief from the above. I received a call from PCO
wondering. Thanks.
Edith Morber
Director, SPIIER/IGA I Directrice, ISPIREIAIG
Natural Resources Canada I Ressources naturelles Canada
580 Booth Street, 11th Floor, Room B8-1 I 580, rue Booth, 11e etage, piece B8-1
Ottawa, ON
K1A OE4
996-2918

2010-12-06

000234

Page 1 of2

RE: AbitibiBowater

E ,lder, Kiran Kaur


From:

Thompson, Kate [Kate.Thompson@fin.gc.ca]

Sent:

February 9, 2009 4:38PM

to:

Leblanc, Alfred

Cc:

Hayes, Duane; Behboodi, Rambod

PCO~

BCP~

Original: 3XOOG-~t:a
Copies:

Subject:

Alfred,

!dent:~

2009-10-06
5.23

000235

RE: AbitibiBowater

Page 2 of2

Kate Thompson
Counsel! Avocate

5.23

General Legal Services Division 1 Division des services juridiques generaux


Law Branch 1 Direction juridique
Department of Finance Canada 1 Ministere des Finances Canada
Ottawa, Canada K1A OG5
Kate.Thompson@fin.gc.ca
Telephone 1 Telephone 613-947-0724 I Facsimile 1 Telecopieur 613-944-5566 I Teletypewriter 1 Teleimprimeur
613-995-1455
Government of Canada 1 Gouvernement du Canada

2009-10-06

000236

Page 1 of 1

Message

Smith, Robert
From:

Gilbert, Anne

Sent:

February 9, 2009 1:27 PM

To:

Smith, Robert

Subject:

An ne

s.21 (1 )(b)
s.23

2009-02-09

000237

Page 1 of3
5.19(1)
Maille, Marie Anick

5.20(1 )(b)
5:20(1 )(c)

From:
Sent:

February 9, 2009 4:19PM

To:

Macleod, Alfred

Cc:

Vanstone, Melanie; Gilbert, Anne

5.20(1 )(d)

Subject: AbitibiBowater- press article of interest and update

Bonjour Alfred,

Best regards,

Newfoundland hurts itself with Abitibi seizure

BILLDYMOND
Globe and Mail
February 6, 2009 at 2:38PM EST
Newfoundland and Labrador Premier Danny Williams may believe that nationalizing the timber and
hydro power assets of AbitibiBowater Inc. is a win-win situation. The Premier could not be more wrong.
This is a lose-lose situation both for the province and Canada as a whole.
Serious harm has already been done to the province's and Canada's reputation as a secure location for
foreign investment. Urgent action is necessary to remedy the harm by paying prompt and fair
compensation to AbitibiBowater.
On Dec. 16, Premier Williams announced the nationalization of AbitibiBowater's timber and hydro
power assets to take effect in March, when the company ceases pulp and paper operations in the
province. In a single day of debate, the Newfoundland legislature adopted an act authorizing the
nationalization and denying any right to compensation. If any is to be paid, the government will decide
the amount.
Further, the legislation specifically wiped out AbitibiBowater's legal rights. Predictably, AbitibiBowater
vigorously rejected the legislation as a violation of Canada's North American free-trade agreement
obligations.
The central issue at stake in this sorry affair is not Newfoundland's right under NAFTA to nationalize

2009-02-09

000238

Page 2 of3
AbitibiBowater's assets. To be sure, the adoption oflegislation in a single day without affording a
hearing to the company smacks of rough justice indeed, if not a vengeful attitude by the province toward
the company.
The real harm arises from denying any entitlement to compensation and the extinction of
AbitibiBowater's legal rights. NAFTA is quite clear on these issues. Any nationalization must be
conducted in accordance with due process and accompanied by the payment of prompt and adequate
compensation. Due process means at a minimum that the amount of compensation should be assessed by
an independent tribunal and be subject to judicial review. The requirement is designed to deal precisely
with a situation such as the nationalization of AbitibiBowater's property. There can be little doubt that
AbitibiBowater has a compelling NAFTA case.
Under NAFTA, it would be the federal government that would have to defend Newfoundland's action
and the federal government that would be on the hook to pay any damages awarded to AbitibiBowater.
What kind of a defence should Canada make if AbitibiBowater launches a NAFTA challenge? Much as
the denial of legal rights in a country that prides itself as a law-abiding society should outrage any
Canadian, a weak defence would expose all Canadians to significant financial liabilities for no gain.
The first two NAFTA cases brought against Canada involving equally blatant breaches of Canada's
obligations to treat foreign investors fairly were costly. The first case challenged the ban of a gasoline
chemical made by a U.S. company in Canada on patently false environmental grounds and cost the
taxpayers $13-million in an out-of-court settlement. In the second, the arbitrators found that a Canadian
prohibition ofhazardous waste exports deliberately discriminated against a U.S. company and awarded
$6-million in damages.
A robust defence would be even worse.
For decades, Canada has worked hard to convince foreign investors that Canada is a reliable place to
invest, governed by the rule oflaw. Canada is open for business, we claim, and Newfoundland explicitly
says so on its website. Federal and provincial trade missions- often led by premiers- our diplomatic
offices abroad and a vast array of services made available to foreign investors are all intended to
strengthen Canada in the global competition for investment. For many years, Canada has been
aggressively negotiating treaties to protect Canadian investors in other countries from actions of the type
taken by Newfoundland. These treaties replicate the obligations that Newfoundland has now breached.
A vigorous defence of the right to nationalize foreign-owned private property without compensation
while sweeping aside the legal rights of the investor would further damage Canada's reputation. At a
time of a global credit crunch, when investors prize security and stability above all else, this is the
wrong message to send. It would, moreover, say loudly and clearly to our investment treaty partners that
Canada has no intention ofliving up to the same obligations that we ask of them.
How do we get out of this problem with the least harm? It is not fundamentally about the rights and
wrongs of the nationalization. And a NAFTA case would take years to resolve. The problem is
transparency, fair dealing and the rule of law.
The federal government should urge the government ofNewfoundland and Labrador to engage in
timely, good-faith negotiations of a settlement, including the prospect of third-party mediation. It should
make clear that when every dollar is needed to help the economy out of the recession, going deeper into
deficit to pay for the hasty and ill-considered nationalization of AbitibiBowater property is not on the

2009-02-09

000239

Page 3 ofJ_ 19 ( 1 )
federal agenda.
Premier Williams may have convinced himself that he holds the high ground as the courageous defender
of provincial interests. When populism collides with principle, however, principle usually suffers. And
the damage can be long term. Reputations for fair and honest dealing depend critically on adherence to
principle and the most basic elements of justice. Good reputations can be lost overnight and can take
decades to repair. Witness how investment dried up in many developing countries when foreign property
was nationalized and no compensation was paid.
This dispute casts a dark shadow over the bright economic future ofNewfoundland. To exploit its
resource riches and diversifY its economy, the province needs investors and investment both within and
outside Newfoundland. Mr. Williams needs to stop acting like the Premier of a "have not" province and
adjust to the new paradigm.
The treatment of AbitibiBowater runs the risk of derailing the rosy economic prospects of
Newfoundland. Common sense and self-interest both call for a fair, expeditious settlement with
AbitibiBowater.
Bill Dymond is senior fellow at the Centre for Trade Policy and Law, Carleton University. He is a
retired Canadian diplomat with extensive experience in the negotiation of international trade and
investment agreements.

Confidentiality Message
This e-mail is confidential and is intended for the exclusive use of the addressee. Any other person is stricly prohibited from disclosing, distributing or
reproducing it. If the addressee cannot be reached or is unknown to you, please inform the sender by return e-mail immediately and delete this e-m ail
message and destroy all copies. Thank you.
Avis de confidentialite
Ce message, transmis par courriel, est confidentiel et est l'usage exclusif du destinataire ci-dessus. Toute autre person ne est par les presentes avisee qu'il
lui est strictement interdit de le diffuser, de le distribuer ou le reproduire. Si le destinataire ne peut etre joint ou vous est inconnu, veuillez informer
l'expediteur par courrier electronique imediatement et detruire ce message et toute copie de celui-ci. Merci.

2009-02-09

000240

Page 1 of 1

Message

Gilbert, Anne
From:

Vanstone, Melanie

Sent:

February 10, 2009 10:37 AM

To:

Bordeleau, Annik; Flowers, William

Cc:

Gilbert, Anne

Subject: Abitibi
Hi,
Just wondering if either of you is following what's happening with AbitibiBowater in Ontario (possible sale of their
hydro assets there), or generally the company's financial issues.
There is no direct connection to NL, but I think folks are watching to see what approach the province will take.
Thx
Melanie

2010-12-06

000241

Message

Page 1 of 1
5.23

Neilson, David
From:

Boisvert, Lucette

Sent:

February 10, 2009 1:08 PM

To:

Kaur Bhinder, Kiran

Subject:

FW: Abitibi

Attachments:

-----Original Message----From: Mondou, Isabelle


Sent: February 10, 2009 1:08 PM
To: Boisvert, Lucette
Subject: FW:
Pour Kiran.

lsabelle Mondou
Director, Legal Operations
Directrice, Operations juridiques
Office of the Counsel to the Clerk of the Privy Council
Bureau du Conseiller juridique aupres du greffier du Conseil prive
613-957-5450
-----Original Message----From: Meg.Kinnear@international.gc.ca [mailto:Meg.Kinnear@international.gc.ca]
Sent: Tuesday, February 10, 2009 12:23 PM
To: Mondou, Isabelle
Subject:

Isa belle

Meg

Meg Kinnear
Senior General Counsel & Director General /Avocat general principal et Directeur
general
Trade Law Bureau /Direction generale du droit commercial international (JLT)
Government of /Gouvernement du Canada
125 Sussex Drive I 125, promenade Sussex
Ottawa, Ontario Canada K1A OG2
Tel. I Tel. (613) 943-2803
Fax/ Telec. (613) 944-0027
e-mail/courriel: f:ileg,k;innear@

2010-11-29

000242

Pages 243 to I

a 245

are withheld pursuant to section


sont retenues en vertu de l'article

23

of the Access to Information Act


de la Acces

a l'information

Dl

'Government of Canada Gouvernement du Canada


Privy Council Office
Bureau du Conseil prive

lnfoXpress:

To:

414422

CIMS: 2009-IGA-00147
Folder: 68361 0

Date:

Natasha Rascanin

FEB 10

?On~

MEMORANDUM FOR JOHN KNUBLEY I NOTE A L'INTENTION DE JOHN KNUBLEY


Subject:

5 19 1
" ( ) OPTIONS FOR RECOUPING NAFTA ARBITRAL AWARDS
VERSIONS:

Fro(!)

G(aham Swan

Via:
\V

D Your signature

D Information

Votre signature
DFor decision
Pour decision

D For comments
Pour commentaires

D Material for the PM


Materiel pour le PM
COMMENTS:

CONSULTATION:

IGA/AIG

OTHERPCO/
AUTRE BCP

o SA/AS

o SO/OS
o ERDP/PDER

XSPRJPSR

oP&P
o LSMP/SLPM
o PCO/BCP - COM
o MOG/ AG.
o Leg. Couns./Ops Jur.
o Dem. Ref/Ref Dem
o F & DP/ P. E & 0

oCOMMS

OTHER/AUTRE

Finance

cc:

DISTRIBUTION :

5.19(1)

R. Coleman
A. Macleod
N. Rascanin
K. Campbell
P. Aterman

Central File
FPR Officer
Circ Copy

Draftmg Officer: Gilbert/gl

::ODMA\PCDOCS\PCO_PROD\414652\1

000246

Government of Canada
Privy Council Office

Gouvernement du Canada
Bureau du Conseil prive

Ottawa, Canada
K1AOA3

SECRET

FEB 10 2009
5.14
MEMORANDUM FOR JOHN KNUBLEY

5.21 (1 )(b)

OPTIONS FOR RECOUPING NAFTA ARBITRAL AWARDS

(Information Only)

Canada

000247

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- 3-

SECRET

5.14
5.21 (1 )(b)

5.19(1)
Natasha Rascanin
Gilbert/Smith/gl

000249

Page 1 of3
5.19(1)
Vanstone, Melanie
From:
Sent:
To:

Cc:

February 18, 2009 2:21 PM


Macleod, Alfred
Vanstone, Melanie; Gilbert, Anne

Subject: AbitibiBowater - National Post - Mickey Kantor

Bonjour,
In case you missed it in your clippings this morning.
Best regards,

Canada's contradiction Despite Ottawa's commitment to NAFTA, Newfoundland is


jeopardizing u. s.-Canadian trade National Post February 18, 2009 Mickey Kantor
The u. s.-Canada trade relationship is the largest between any two countries in the
world. Trade -- massive and mutually beneficial -- has always been at the centre of the
Canada-U. s. relationship. The signing of NAFTA, more than 14 years ago, marked a major
step forward in building the economy of North America and solidified u. s. partnerships
with Mexico and Canada--economically and politically.
As partners in the world's largest trading relationship, Canada and the United States
demonstrate the benefits of open trade and prove that trade problems can be resolved in
a way that protects the interests of all sides.
NAFTA works, and it is in our mutual interest to keep it working. But if one of the
partners allows a clear and substantial violation, we are obliged to address that issue
to avoid undercutting and weakening the credibility of the NAFTA.
Further, as with any relationship, addressing these issues takes hard work, trust and
respect. During last year's u. s. presidential campaign, NAFTA took centre stage as
both candidates for the Democratic nomination were questioned on their commitment to
supporting and building on a mutually beneficial trade relationship. While both
President Obama and Secretary of State Clinton pledged to vigorously defend American
interests, they both confirmed that open trade works. Clearly, the United States,
Canada and Mexico will be confronted with updating and polishing NAFTA, which is long
overdue given that initial NAFTA negotiations began over 18 years ago.
It is against this backdrop that President Obama makes his visit to Ottawa
-- the first foreign trip of his administration. During this trip, both countries will
undoubtedly proclaim that neither will take any steps towards adopting measures that
are inconsistent with our mutual obligations.
Our NAFTA commitments address the potential of our mutual interest -- in energy,
agriculture and more. But we are now confronted with a challenge that has the potential
of undermining the credibility of NAFTA. The recent decision by the Province of
Newfoundland and Labrador to expropriate the assets of AbitibiBowater, a u. s.
corporation that has done business in the province for over a century, could
potentially derail our co-operative approach. Leaving aside the constitutional
2010-10-28

000250

Page 2 ot3

questions it may pose to Canadians, Newfoundland's


actions undermine the credibility of Canada's commitment to our mutual responsibilities
under NAFTA.
Under Chapter 11 of NAFTA, Newfoundland does have the right to expropriate under
certain circumstances ... but it also has the obligation to compensate the company at
the fair market value for its lost assets.
Expropriation without a quick and fair resolution will only increase economic
uncertainty and limit global access, including trade, direct investment, joint ventures
and strategic business partnerships into Newfoundland and Labrador, and ultimately into
Canada.
When President Obama arrives in Ottawa, he will be encountering a nation seized by
contradictions. On one hand, Canada historically argues against protectionism and warns
of the consequences of the inevitable confrontation that would result. On the other,
one constituent province disregards an international treaty in an unequivocally and
uncompensated unilateral act of nationalization.
Canada must think carefully about the mixed messages it sends to the new U.

s. administration. President Obama will attempt to reposition the United States' stance
toward the world and break from the past eight years of unilateral action. But, in the
face of a serious challenge to the credibility of NAFTA, he will be forced to
vigorously defend the obligations solemnly made 14 years ago.
NAFTA is a rules-based trade system designed to ensure fairness for all participants.
It also facilitates jobs and protects the environment, business competitiveness and the
quality of life of those living under its umbrella. In a period of economic
uncertainty, it is even more pressing that we all play by the same rules and eliminate
any barriers to global trade and actions that create further economic and business
uncertainties for the very entities that will lead both Canada and the United States
out of this downturn.
Actions such as an unsupportable and irresponsible provincial nationalization threaten
the livelihood of Canadians and Americans, and raise a serious and contentious trade
issue when we should be building new, co-operative approaches to restoring our
economies and promoting mutual investments.
-Mickey Kantor is a partner at Mayer Brown LLP in Washington and sits on FleishmanHillard's international advisory board, whose Canadian arm ad-vises AbitibiBowater. He
served as u. S. trade representative and secretary of commerce under president Bill
Clinton.

5.19(1)

2010-10-28

000251

Page 3 of3
Confidentiality Message
This e-mail is confidential and is intended for the exclusive use of the addressee. Any other person is stricly prohibited from disclosing, distributing or
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message and destroy all copies. Thank you.
Avis de confidentialite
Ce message, transmis par courriel, est confidentiel et est !'usage exclusif du destinataire ci-dessus. Toute autre person ne est par les presentes avisee qu'il
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l'expediteur par courrier electronique imediatement et detruire ce message et toute eo pie de celui-ci. Merci.

2010-10-28

000252

Message

Page 1 of2

Neilson, David
From:

Shuttle, Paul

Sent:

February 23, 2009 4: 10 PM

To:

Kaur Bhinder, Kiran

Cc:

Shuttle, Paul

Subject: I
Solicitor-Client
Kiran:

Thanks,
Paul

5.23
-----Original Message----From: Kaur Bhinder, Kiran

Sent: February 23, 2009 3:45 PM


To: Shuttle, Paul

2010-11-29

000253

Message

Page 2 of2

Subject:
Paul,

Kiran Kaur Bhinder


Counsel I Conseillere juridique
Legal Operations I Operations juridiques
Privy Council Office I Bureau du Conseil prive
Government of Canada I Gouvernement du Canada
90 Sparks St., Room 806L I 90, rue Sparks, piece 806L
Ottawa, Ontario K1A OA3
(T) 613 948 6676 (F) 613 957 5032

5.23

kiran.k~UJLb.binder@pco:bcp.ge,c<=~

2010-11-29

000254

Pages 255 to I

a 280

are withheld pursuant to section


sont retenues en vertu de l'article

23
of the Access to Information Act
de la Acces

a l'information

Message

Page 1 of 1

Neilson, David
From:

Kaur Bhinder, Kiran

Sent:

March 2, 2009 10:54 AM

To:

'sylvie.tabet@international.gc.ca'

Subject:
Solicitor - client privilege
Hello Sylvie,

Kiran Kaur Bhinder


Counsel I Conseillere juridique
Legal Operations I Operations juridiques
Privy Council Office I Bureau du Conseil prive
Government of Canada I Gouvernement du Canada
90 Sparks St., Room 806L I 90, rue Sparks, piece 806L
Ottawa, Ontario K1A OA3
(T) 613 948 6676 (F) 613 957 5032

5.23

kiran. kaurohinder.@p<:;o-bcp.ge,ca

2010-11-29

000281

REPORT ON COMMITTEE HEARINGS


Name of Committee: Standing Committee on International Trade (CIIT)
Report prepared by: Alexa Barrera, DFAIT, 944-2089
Date and time: March 1Oth, 2009
Location: 308 West Block
Witness(es):
Department of Foreign Affairs and International Trade
Don Stephenson, Assistant Deputy Minister, Trade Policy and Negotiations
Deborah Lyons, Director General, North America Commercial Affairs
Martin Moen, Director, North America Commercial Affairs
Callie Stewart, Deputy Director, Technical Barriers and Regulations
Overview of hearing:
PART ONE: The committee began by listening to the opening statement of Don Stephenson, Assistant
Deputy Minister. He highlighted the importance of Canada's relationship with the United States and how
the Canadian government is seeking to renew its bilateral relations with the new U.S. Administration. The
meeting continued with questions from CIIT members referring mostly to the Western Hemisphere Travel
Initiative (WHIT) which states that after June 1st, Americans wishing to visit Canada will be required to
have a passport as identification. Members stated their concern over the effect this initiative will have
with border crossing of people and trade and inquired several times if the government had asked for an
extension. Members inquired on the promotion budget for Canada in the U.S .. Ms. Lyons stated that over
$3.5 million are dedicated to business promotion. Other questions referred to the Security and Prosperity
Partnership (SPP) and their current activities; and on Softwood Lumber. Regarding the SPP, Ms. Lyons
noted that DFAIT is not the lead on the partnership and that such questions should be addressed to
Ministries of Industry and Public Safety. Other questions touched the topics of NAFTA Chapter 11 and
Country of Origin Labelling.
PART TWO: Committee business
The Chair presented a draft committee business schedule to members. He also asked the committee if
they agreed that the four areas of focus of the Canada!U.S. Relations study should be: Western
Hemisphere Travel Initiative; Country of Origin Labelling; Northern Border and Security; and 2010
Olympics and related matters. Members voted and agreed on these four areas. A motion by Peter Julian
(NDP) to invite Civil Society Organizations and government officials on the matter related to Dow
Agrosciences NAFTA Chapter 11 suite on Quebec's province-wide ban on residential use of pesticides.
Scott Brison (Liberal) supported the motion, requesting that the case of AbitibiBowater in Newfoundland
and Labrador be considered as well. The motion passed and the meeting will take place March 24th, 2009.
Highlights of hearing:
Scott Brison (Liberal) :
What are we doing to achieve a delay of the WHTI?
Origin and Labelling: what are we doing on that?
John Cannis (Liberal):
How are we going to work with the new Obama administration if they always looking for their
own interests, and then we consider ours?
Mario Silva (Liberal):
Has the government asked for an extension on the June 1st WHTI deadline?
Serge Cardin (BQ):
What is the current state of the SPP? Active? Not so active?
QC is being sued under NAFTA Chapter 11. Obama put NAFTA on the table, is the department
considering any other NAFTA cases?
What can we do regarding the "Buy American" clause?
Peter Julian (NDP)
Can you confirm that SPP meetings continue to be supported by DFAIT?
What is Canada's promotion budget for Canadian products in the U.S.?
How is the Department adjusting to the new Obama agenda?
Softwood Lumber Agreement/Sell-out
Ron Carman (Conservative)
Concern about the border and 2010 Olympics. What is being done?
Have you considered a Canada-U.S. perimeter?
Follow-up required/Next steps:

Response regarding the position of the department on the WHTI deadline is to be given to the
Chair and Members.

000282

Page 1 of 1

Message

Gilbert, Anne
From:

Vanstone, Melania

Sent:

March 11, 2009 1:56 PM

To:

Gilbert, Anne

Subject: RE: Meeting on Friday on AbitibiBowater

Melania Vanstone
mvanstone@pco-bcp.gc.ca
613-957-5447
-----Original Message----From: Gilbert, Anne
Sent: Wednesday, March 11, 2009 11:17 AM
To: Vanstone, Melanie
Subject: Meeting on Friday on AbitibiBowater

5.21 (1 )(a)
5.21 (1 )(b)
5.19(1)

Hi Melania, I'm starting in on an update note to my DM for the meeting on Friday and wanted to follow-up on our
conversation to ask if you have any further information on objectives of the meeting, most recent interactions if
any between DFAIT and NL. My understanding is that the last point of contact was the meeting with
Are you aware of whether the any other contact was undertaken

5.21 (1 )(b)
Any additional information you think I need to include in the note would be appreciated.
Thanks,
An ne

2009-03-11

000283

I+I

Government of Canada Gouvernement du Canada


Privy Council Office
Bureau du Conseil prive

lnfoXpress:

To:

422112

CIMS: 2009-IGA-00303
Folder: 688759

Date:

Natasha Rascanin

MEMORANDUM FOR JOHN KNUBLEY I NOTE

MAR 13 -2fl09

A L'INTENTION DE JOHN KNUBLEY

Subject:
UPDATE ON ABITIBIBOWATER IN PREPARATION
FOR THE MARCH 16,2009, MEETING OF DEPUTY MINISTERS

'{\ }c')'\
From:

VERSIONS:

G't-aham'Swan

Via:
D Information

DYour signature
Votre signature

D For comments

D For decision
Pour decision

Pour commentaires
D Material for the PM
Materiel pour le PM

CONSULTATION:

COMMENTS:

IGA/AIG

OTHER PCO/
AUTRE BCP

o SA/AS

o SD/DS

X ERDP/PDER
o SPR/PSR
o COMMS

oP&P
o LSMP/SLP[VI
o PCO/BCP - COM
o MOG/AG.
o Leg. Couns./Ops Jur.
o Dem. Ref/Ref Dem
o F & DP/ P. E & D

OTHER/AUTRE

cc:

DISTRIBUTION :

5.19(1)

R. Coleman
A. MacLeod
N. Rascanin
K. Campbell
P. Aterman

Central File
FPR Officer
Circ Copy

Drafting Officer: Gilbert/et

::ODMA\PCDOCS\PCO_PROD\422351 ~1

000284

1+1

Government of Canada
Privy Council Office

Gouvernement du Canada
Bureau du Conseil priye

Ottawa Canada
K1A OA3

SECRET

MAR

13

2009

MEMORANDUM FOR JOHN KNUBLEY

UPDATE ON ABITIBIBOWATER IN PREPARATION


FOR THE MARCH 16, 2009 MEETING OF DEPUTY MINISTERS
(Information Only)

SUMMARY
0

s.21 (1 )(a)
s.21 (1 )(b)
0

ot
Processed

...
Canada

s.21 (1 )(a)
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de la Acces

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-3-

SECRET

s.21 (1 )(a)

s.21 (1 )(b)

Not
Processed

s.21 (1 )(a)
s.21 (1 )(b)

s.19(1)
Natasha Rascanin
Attachments
Gilbert/ct/gl

000287

Pages 288 to I

a 296

are withheld pursuant to section


sont retenues en vertu de l'article

14

of the Access to Information Act


de la Acces

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are withheld pursuant to section


sont retenues en vertu de l'article

14

of the Access to Information Act


de la Acces

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Page 300
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21 (1 )(b)

of the Access to Information Act


de la Acces

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Page 301
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of the Access to Information Act


de la Acces

a l'information

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23

of the Access to Information Act


de la Acces

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of the Access to Information Act


de la Acces

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Page 1 of 1

Message

Gilbert, Anne
.............................~.. - ...-...... ~<~='-
...~
.... ~
.. --.~ ..

From:

Vanstone, Melanie

Sent:

March 23, 2009 3:58 PM

To:

Gilbert, Anne

~~

Subject:
We did not send the note after all.

Melanie Vanstone
mvanstone@pco-bcp.gc.ca

613-957-5447
-----Original Message---
From: Gilbert, Anne
Sent: Monday, March 23, 2009 3:12PM
To: Vanstone, Melanie

5.21 (1 )(b)

Subject::
Melanie,

Thanks,
An ne

2010-12-06

000306

Page 1 of3

Vanstone, Melanie
From:

Vanstone, Melanie

Sent:

March 27, 2009 6:53PM

To:

Guenette, Corinne; Wilkie, Christopher; Angus, Tim; Flowers, William; Bordeleau, Annik

Cc:

Sambol, Joseph

Subject: Re: For policy check today if possible pis: AbitibiBowater refinancing plan deadline TODAY Media
Lines

Based on what I know the general lines are ok


who may be more up to date.

But I defer to other

Sent from my BlackBerry Wireless Handheld

Sent from Wireless Network I Envoye du reseau sans fil.

From: Guenette, Corinne


5.21 (1 )(b)
To: Wilkie, Christopher; Angus, Tim; Vanstone, Melanie
Cc: Sambol, Joseph
Sent: Fri Mar 27 18:43:03 2009
Subject: For policy check today if possible pis: AbitibiBowater refinancing plan deadline TODAY Media Lines
Hi,
Pis see below the lines proposed by IC for Abitibibowater. For policy check asap pis- their deadline is 5pm, this may pop up
in tonight's news.
They seem solid,
Your thoughts?

ABITIBIBOWATER REFINANCING PLAN DEADLINE


ISSUE
AbitibiBowater has been granted an extension by secured U.S. lenders to restructure its multi-billion
dollar debt load. AbitibiBowater has until midnight, March 27, 2009, to reach an accord with lenders to
allow it to proceed with the company's proposed plan to restructure $1.8 billion in debt at U.S.
subsidiary Bowater Inc.
Approval of the lenders is critical if AbitibiBowater is to avoid a creditor-protection filing that could force
the liquidation of assets and further mill closures in both Canada and the U.S.

KEY MESSAGES
The Canadian forestry industry is facing several challenges both domestically and globally.

2010-11-22

000307

Page 2 of3

In these difficult economic times, companies are exploring various options to strengthen their financial
health.
AbitibiBowater's actions represent an internal business decision and it would be inappropriate for the
government to comment further on them.
The Government of Canada is continuing to closely follow the developments at AbitibiBowater.

SUPPORTING MESSAGES
This government's commitment to a strong and successful forestry industry has been clear and
unwavering.
This government is committed to providing support for Canada's resource-based industries, including
the forest sector.
We are helping the forestry industry to find long-term solutions to the real challenges it faces.

Newfoundland and Labrador government takeover of AbitibiBowater assets


The dispute over hydroelectric assets between the Province of Newfoundland and Labrador and
AbitibiBowater remains ongoing. lt would be inappropriate to comment further at this time.

Economic Action Plan


Budget 2009 provides $170 million over two years to support market diversification and innovation
initiatives.
In addition, Budget 2009 provides $1 billion over two years for a Community Adjustment Fund. This
fund will help mitigate short-term impacts of restructuring in communities across Canada, including
forestry-dependent communities.

Budget 2009 also provides support for Canadian workers affected by the global economic downturn.
This government will continue to take steps to support the marketing of Canadian products abroad,
business innovation and workers facing transition.

SPOKESPERSON
Jyotsna Dalvi, A/Director General, Resource Processing Industries Branch, 613-954-3394

MEDIA RELATIONS OFFICE


613-943-2502

BACKGROUND
AbitibiBowater Inc., incorporated in the U.S. and headquartered in Montreal, is the eighth largest
publicly traded pulp and paper" manufacturer in the world. The company owns or operates 25 pulp and
paper facilities and 30 wood products facilities located in the U.S., Canada, the U.K. and South Korea.
The company has 12,000 employees in Canada, of which 50 per cent are in Quebec. Like other

2010-11-22

000308

Page 3 of3
forestry industry companies, AbitibiBowater has faced significant challenges over the last few years
particularly the current financial/credit crisis, weak pulp and paper markets, and a collapsing demand
for newsprint in North America.
AbitibiBowater remains the most leveraged company in the forestry industry and currently shows poor
liquidity. lt has US$6.2 billion total debt load of which US$919 million is due to be refinanced or repaid
in 2009, with US$347 million due in March. The company is working with creditors on efforts to
significantly reduce its outstanding debt burden, particularly with respect to its short-term obligations.
On March 25, 2009, AbitibiBowater was granted a fourth extension by its creditors, which include Bank
of America, Citicorp and Wachovia Corp., with respect to its debt load restructuring. AbitibiBowater has
until midnight, March 27, 2009, to reach an accord with lenders to allow it to proceed with the
company's proposal to restructure $1.8 billion in debt at its Bowater Inc. subsidiary.
According to reports, some creditors could force the company or its Bowater and Abitibi units to file for
court protection. The company wants to exchange debt at subsidiaries Bowater lnc and AbitibiConsolidated lnc for new debt, stock and warrants, as it struggles with a sharp decline in newsprint
demand and revenue. The proposed debt restructuring of Abitibi-Consolidated is contingent on the
success of the Bowater debt exchange. The company says that by easing its debt load it will be able to
weather the current economic downturn that has reduced demand for paper and lumber.
GRAND FALLS-WINDSOR FACILITY AND CONFLICT WITH
GOVERNMENT OF NEWFOUNDLAND AND LABRADOR

AbitibiBowater has indicated it will pursue a challenge of the Newfoundland and Labrador legislation
expropriating the company's hydro-generating assets and water and timber rights under the North
American Free Trade Agreement.
On March 23, the Government of Newfoundland and Labrador indicated talks with AbitibiBowater over
compensation for the expropriation had broken off. AbitibiBowater had been pursuing compensation of
$300 million, which the province felt was too high. The government would not say how far apart the two
sides were in terms of negotiations.
The Government of Newfoundland and Labrador brought in the expropriation legislation in December
2008 in response to the company's announcement it was closing its Grand Falls-Windsor mill, which
AbitibiBowater has called one of the highest cost operations of its kind in North America. The company
officially closed the Grand Falls-Windsor facility on February 12, 2009, weeks ahead of the late March
date initially set in December 2008.
lt has been reported that the Government of Newfoundland and Labrador will assume operation of the
company's hydroelectric assets at its closed paper mill in central Newfoundland as of midnight March
28, 2009, through its energy corporation, Nalcor Energy.
The Honourable Stockwell Day, Minister of International Trade, confirmed in the House of Commons on
January 28, 2009, that the federal government is playing a role in resolving the dispute between the
company and the provincial government.

2010-11-22

000309

Gilbert, Anne
From:
Sent:
To:
Subject:

Vanstone, Melanie
March 30, 2009 1:39PM
Diogo, Brigitte; Gilbert, Anne
FW: Draft Federal Statement

Attachments:

Federal Statement rev 1.doc

Federal Statement
rev l.doc (3 ...

Hi

5.14

Melanie Vanstone
mvanstonepco-bcp.gc.ca
613-957-5447

5.21 (1 )(b)

-----Original Message----From: IMCEAX400-c=CA+3Ba=govmt+2Ecanada+3Bp=gc+2Bdfait+2Emaeci+3Bs=Ready+3Bg=Robert+


3Bx400.pco [mailto:IMCEAX400-c=CA+3Ba=govmt+2Ecanada+3Bp=gc+2Bdfait+2Emaeci+3Bs=Ready+
3Bg=Robert+3Bx400'.pco]
Sent: Wednesday, March 25, 2009 12:49 PM
To: Vanstone, Melanie; Gilbert, Anne
Cc: IMCEAX400-c=CA+3Ba=govmt+2Ecanada+3Bp=gc+2Bdfait+2Emaeci+3Bs=Stephenson+3Bg=DOn+
3Bx400.pco
Subject: Draft Federal Statement
Importance: High
Melanie, as discussed, here is a draft of what we have at this point.
input from DMT.

It has not yet had

As we work this along, if you have comments at this stage plea.se let me know.
Rob

000310

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of the Access to Information Act


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Ready, Robert -ANA


From:

Ready, Robert -ANA

Sent:

April 20, 2009 7:47AM

To:

Levesque, Louis -DMT; Kamarianakis, Emmanuel -DMT

Cc:

Beck, Stewart -BFM; Robertson, Paul -TPN; Burney, lan -TPX; Stephenson, Don -TPC

Subject:

RE: AbitibiBowater - Newfoundland up date

s.21 (1 )(b)
s.23

Importance: High

Rob Ready

2009/04/20

000314

Page 2 of3

From: Stephenson, Don -TPC

Sent: April 17, 2009 4:46PM


To: Ready, Robert -ANA
Cc: Levesque, Louis -DMT
Subject: FW: AbitibiBowater- Newfoundland up date
Rob,
l couldn't get through to
Please call him Monday and set up a meeting to get further details. Then
recommend a course of action to DMT.
Don Stephenson
Assistant Deputy Minister, Trade Policy & Negotiations I Sous ministre adjoint, Politique et negociations
commerciales
Foreign Affairs & International Trade Canada I Affaires etrangeres et Commerce international Canada
111 Sussex Drive, 8th floor, Sussex Pavillion I 111, promenade Sussex. Bh!Jme etage, Pavilion Sussex
Ottawa, Ontario, Canada, K1N 1J1
Tel.+ 613 992-0293
Fax+ 613 996-1667

5.16(2)

E-mail I courriel: QQIJ,?_tpb~D~QD@ioi~m?liQJJ.C'll,gg_,G?

From:

5.19(1)

Sent: April 1/, 2009 2:43 PM

5.20(1 )(b)

To: Stephenson, Don -TPC


Subject: AbitibiBowater - Newfoundland up date

5.20(1 )(c)

Hi Don,

5.20(1 )(d)

2009/04/20

000315

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a l'information

IN THE UNITED STATES BANKRUPTCY COURT


FOR THE DISTRICT OF DELAWARE

In re:
ABITIBIBOWATER INC., et al., 1
Debtors.

)
)
)
)
)
)
)

Chapter 11
Case No. 09-11296 (KJC)
Jointly Administered

(AMENDED) CONSOLIDATED LIST OF CREDITORS


HOLDING THE SO LARGEST UNSECURED CLAIMS
On April16, 2009, the above-captioned Debtors filed in this Court petitions for
relief under chapter 11 oftitle 11 ofthe United States Code (the "Bankruptcy Code"). The
following is an amended consolidated list of creditors (the "List of Creditors") holding the fifty
(50) largest unsecured claims against the Debtors. The List of Creditors reflects estimated
amounts owed by the Debtors as ofMarch 31, 2009.
The Debtors take no position at this time regarding whether any of the parties
included in the List of Creditors are "insiders" of the Debtors, as that term is defined in
section 101 (31) of the Bankruptcy Code, and the inclusion or exclusion of any party to this List
of Creditors shall not constitute an admission by, nor shall it be binding on, the Debtors in any
respect. The Debtors expressly reserve the right to, in their sole discretion, challenge the
validity, priority and/or amount of any obligation reflected herein.

The Debtors in these cases, along with the last four digits of each Debtor's federal or Canadian tax
identification number, are: AbitibiBowater Inc. (6415), AbitibiBowater US Holding 1 Corp. (6050),
AbitibiBowater US Holding LLC (N/A), AbitibiBowater Canada Inc. (3225), Abitibi-Consolidated Alabama
Corporation (4396), Abitibi-Consolidated Corporation (9050), Abitibi-Consolidated Finance LP (4528), Abitibi
Consolidated Sales Corporation (7144), Alabama River Newsprint Company (7247), Augusta Woodlands, LLC
(0999), Bowater Alabama LLC (71 06), Bowater America Inc. (8645), Bowater Canada Finance Corporation
(8810), Bowater Canadian Forest Products Inc. (2010), Bowater Canadian Holdings Incorporated (6828),
Bowater Canadian Limited (7373), Bowater Finance Company Inc. (1715), Bowater Finance II LLC (7886),
Bowater Incorporated (1803), Bowater LaHave Corporation {5722), Bowater Maritimes Inc. (5684), Bowater
Newsprint South LLC (1947), Bowater Newsprint South Operations LLC (0186), Bowater Nuway Inc. (8073),
Bowater Nuway Mid-States Inc. (8290), Bowater South American Holdings Incorporated (N/A), Bowater
Ventures Inc. (8343), Catawba Property Holdings, LLC (N/A), Coosa Pines Golf Club Holdings LLC (8702),
Donohue Corp. (9051), Lake Superior Forest Products Inc. (9305) and Tenex Data Inc. (5913). The Debtors'
corporate headquarters are located at, and the mailing address for each Debtor is, 1155 Metcalfe Street,
Suite 800, Montreal, Quebec H3B 5H2, Canada.

000317

'(1)

'

'

Na'me ofcreditor

> '' ' j3).


' ' '' (4). '
(5)
:Nature ofdaiiil
Thdicate iL Amount of
' ~~~~)hinib~~' of e~ploye~, a'gent; ' (~rjlqe c~,bt~ tiank > c)ainlj~ '
. cl,ah~' (if ',' '
?,f.d~P:arhnenf()fcreditor ' ' loan, governmj!n(: cqn~ingeQ't; ' ...securel,l also
.... r~mili11r W.ith,~Jaim
c~ntfact,efc;J
. JinJ!q~id~ted, statevah.ie of
. . ,


tiisp:Uteti ot > se~tirityl
. .. ,

'> stibject.to ..
. .
." ; . ... ..
. ..
~et9rf

.;_{:-

' (2),,,

'

i'

~ame;telepbori.e nilmber,and

The Bank of New


York Mellon Global
Corporate Trust, as
Trustee

Christie Leppert
10161 Centurion Parkway
Jacksonville, FL 32256
Fax: 904-645-1921

Bowater Canada
Finance
Corporation 7.95%
Notes due 20 I l

$600,000,000.00

The Bank of New


York Mellon Global
Corporate Tru.st, as
Trustee

Christie Leppert
10161 Centurion Parkway
Jacksonville, FL 32256
Fax: 904-645-1921

Bowater
Incorporated 6.5%
Notes due 2013

$400,000,000.00

The Bank ofNew


York Mellon Global
Corporate Tmst, as
Trustee

Christie Leppert
10161 Centurion Parkway
Jacksonville, FL 32256
Fax: 904-645-1921

AbitibiBowater
Inc. 8%
Convertible Notes
due 2013

$368,900,000.00

Wells Fargo Bank,


National Association,
as Trustee

Guarantee of
AbitibiConsolidated
Company of
Canada 15.5%
Notes due 2010
Bowater
Incorporated 9.0%
Debentures due
2009

$292,629,000.00

The Bank of New


York Mellon Global
Corporate Trust, as
Trustee

Raymond Delli Colli


Vice President
Wells Fargo Bank, N.A.
45 Broadway, 14th Floor
New York, NY 10006
Fax: 212-515-1589
Christie Leppert
10161 Centurion Parkway
Jacksonville, FL 32256
Fax: 904-645-1921

The Bank of New


York Mellon Global
Corporate Trust, as
Trustee

Christie Leppert
10161 Centurion Parkway
Jacksonville, FL 32256
Fax: 904-645-1921

$234,420,000.00

HSBC Bank USA,


National Association,
as Tmstee

Anthony A Bocchino, Jr.


Vice President
10 East 40th Street
New York, NY 10016
Phone: 212-525-1111
Fax: 212-525-1300

Bowater
Incorporated
Floating Rate
Senior Notes due
2010
Bowater
Incorporated
9.375% Debentures
due 2021

$248,092,000.00

$200,000,000.00

As not<ed above, the Debtors reserve their rights to dispute the claims on this schedule on any basis.
The Debtors account and report transactions in Canadian and U.S. dollars depending on whether a transaction
occurs in Canadian or U.S. dollars (or both). This Top 50 List presents all figures in U.S. dollars, asswning a
foreign currency exchange rate based on the April I 5, 2009 exchange rate ofU.S. $1.00 : CDN $1.21 published

in The Wall Street Journal.

000318

(l)

Name ot credit11r.

(2)

.. . <

'

(~f

of

(4)

.. '

or

. i ....

The Bank of New


York Mellon Global
Corporate Trust, as
Trustee
Computershare Trust
Company of Canada,
as Trustee

The Industrial
Development Board of
the County ofMcMinn
Finance Authority of
Maine

Hare & Co.

John Hancock
Financial Services

Nationwide Life
Insurance Company

Steelhead Navigator
Master LP

.. (5). ' <.


Amount of
clahri .(1.{ . , .

NaQ1e; t~leph()nc nl:nnb.er, and , Natun; clairtt ., lhdi()ateif

. .. :fa* 611m~er ~r employ~, ~gent (trade debt~ ~ank


~lai~.j~
... .
or'd~partfuenfonr(lditof .
'.. J!)aJi, .government (\O~tingent,. ,
<
familiar with Claim ''. .
contract, etci)
' . unliquj{IS,t~{l; .
.1
,
.dispute()
subjectto . ,
setorf. . . . . .
I . '.
Cbristie Leppert
10161 CenturionParkway
Jacksonville, FL 32256
Fax: 904-645-1921
Nelia Andrade
1500 University St., 7th Fl.
Montreal, Quebec, Canada
H3A 3S8
Phone: 514-982-7888
Fax: 514-982-7677
David Siklosi
202 North White Street
Athens, TN 37303
Fax: 423-745-5503
Christopher Roney
5 Community Drive
P.O. Box949
Augusta, ME 04332-0949
Tel: 207-620-3520
Fax: 207-623-0095
c/o The Bank of New York
P.O. Box 11203
One Wall Street, 6th Floor
New York, NY 10286
Attn: Alan Finkelman
Tel: 718-315-3200
c/o John Hancock Variable Life
Insurance Co.
Bond and Corporate Finance
Group, C-2-1 0
197 Clarendon Street
Boston, MA 02117
Tel: 617-572-4722
Fax: 617-421-4256
One Nationwide Plaza 1-33-07
Co1umbus, OH 43215-2220
Attn: Corporate Fixed Income
Securities
Tel: 614-677-3022
Fax: 614-249-2418
Jay D. Krister
P.O. Box 21749
Seattle, W A 98111
Tel: 206-689-2436
Fax: 206-689-2451

secured also
.sta~e y~J~e Of
sec~i:ity)

Bowater
Incorporated 9.5%
Debentures due
2012
Bowater Canadian
Forest Products
Inc. 10.85%
Debentures due
2014

$125,000,000.00

Loan Agreement

$103,000,000.00

Loan Agreement

$62,000,000.00

Notes

$24,000,000.00

Notes

$15,000,000.00

Notes

$10,000,000.00

Notes

$10,000,000.00

$103,305,000.00

000319

<tf . . '

. .

(2),.
<
<
: ,(3) <
' '

N~me,tel~ph{)ne~umberi~lld;. :N~tureof.daim
faxnuJilber"ot)mploye~J, ~gent (tra'de debt bank

. ..

~~mt: {)fcreliitf)r

9r.~~Jp1lr~rqent {)f,~retli!O,I~>
~, :

1::

, . ,.;: .;. . . .

The Minnesota Mutual


Life Insurance:
Company

Cede &Co.

Bank of Nova Scotia


Trust Company of
New York, as Trustee

(5)

chiim is

>

A.rpount of

.. .cla~m (if

.c.o~tract; etc~r: , . u?Ii:~~i(}~tejl; , ;,i~te "~~~~of


,
<.
... ,. {),I~P:U~ed j)r
~:t:C:tlri~t.

/ :

' ><

' ioa,g~verh~ll~t> . ~{)n!i~g~n'~ . secured also

'& , .

t'airiiliar:with Cl~hn
:

(4)

)iidicate if

400 North Robert Street


St. Paul, MN 55101
Attn: Investment Department
Fax: 651~665~5424
Attn: Cheryl Hamilton
P.O. Box20
Bowling Green Station
New York, NY 10274
Tel: 1-888~382~2721
Fax: 212-855~3214
Patricia Keene
One Liberty Plaza
New York, NY 10006
Fax: 212-225~5436

..

~...

..

~u'bJ~tto

set~>rf

.>

>

Notes

$9,200,000.00

Notes

$8,400,000.00

AbitibiConsolidated
Finance L.P
7.875% notes due
August 1, 2009
Notes

$7,842,000.00

One Madison Avenue, 2nd Floor


New York, NY 10010
Tel: 212-538-4670
Attn: Anthony Milo
Loan Agreement
Mary A. Brown
City of Grenada,
P.O. Box 2046
Mississippi
Grenada, MS 38902-2046
Phone: 662-226-5878
Fax: 662-226-5254
Loan Agreement
James E. Baker
York County, South
P.O. Box 66
Carolina
York, SC 29745
Fax: 803-684-8550
Trade Debt
Dow Chemical Canada Lockbox B2908
C.P. 1155 Succ Centre Ville
Inc.
Montreal, Quebec H3C 5N7
Fax: 905-238-6639
1650 International Cte, Suite 100 Trade Debt
McBumey Power
P.O. Box 1827
Norcross, GA 30091
Fax: 770-925-7400
Notes
Northwest Farm Credit 1700 South Assembly Street
Spokane, W A 99224
Services
Tel: 800-743-2125
Trade Debt
Lockbox T57009C
Imerys Inc.
P.O. Box 57009
Postal Station A
Toronto, Ontario M5W 5M5
Fax: 770-645-3771

Credit Suisse
Securities USA LLC

.. . .

$7,725,000.00

$4,594,881.00

$3,900,000.00

$3,564,873.28

$3,105,852.86

$2,400,000.00

$2,327,465.64

000320

,..

...

.N!lme of.credit()t

<z) :.. > .

. . ...

...
>.

,.. . . '(5) ..
Amount of
clahu j~
.
clailn (if .
. ..
lQan, government. contingent, ' . secured also
:.contra~t,
ulilJqli)dat.ed, state'value of .
:disputed or . . SCCilrityf ..
stibjecftQ
i , .

(,3J
.
. .
Nattire ofclaim .
f~X UlfJ#JJer()f,empJf)yee, agent~ . .(~p!dede!Jt;bl;!Uk

Nam~,.t~lephope number, and

l:irdepartiO(!l'lt 1Jfc~edit0r:

,. J~miii!lt.jviili

~~~)m

(4)

Indicate if

etc.)

' . ~~t!lff .
Goldman Sachs and
Co.

One New York Plaza, 37th Floor


New York, NY 10004
Fax: 212-428-1585
Attn: Joanne Cook
Federated Mutual
121 East Park Square
Insurance Co.
P.O.Box 328
Owatonna, MN 55060
Fax: 507-455-8246
Principal Mutual Life
711 High Street
Insurance Company
Des Moines, IA 50392
Tel: 800-986-3343
Fax: 515-248-0483
Attn: Deb Epp
Transamerica Life
4333 Edgewood Road N.E.
Insurance Company
Cedar Rapids, IA 52499
Tel: 800-797-2643
Andritz Ltd.
3713 Shady Cove
Birmingham, AL 35243
Fax: 815-301-9493
c/o TH1034
Metso Papier Ltd
P.O. Box 4283
Toronto, Ontario, Canada
M5W5M6
Fax: 770-242-3323
Olin Corporation
490 Stuart Road NE
Cleveland, TN 37312
Fax: 423-336-4830
Clow Darling Limited
1201 Cameron Street
P.O. Box 27087
Thunder Bay, Ontario, Canada
P7COA1
Fax: 807-622-2569
Southern Ionics
201 Commerce Street
West Point, MS 39773
Fax:662-495-2590
General American Life 1821 0 Crane Nest Drive
Insurance Company
Tampa, FL 33647
1
Tel: 800-638-5433
Metso Automation
44 Bowditch Dr.
P.O. Box 8004
Shrewsbury, MA 01545
Fax: 508-852-8172
Ontario Power
1 LB T27527C
Generation
P.O. Box 4275 Station A
Torcnto, Ontario M5W 5V8
Fax: 416-592-3621

< .,

... .

Notes

$2,000,000.00

Notes

$2,000,000.00

Notes

$2,000,000.00

Notes

$2,000,000.00

Trade Debt

$1,997,930.00

Trade Debt

$1,536,378.80

Trade Debt

$1,470,442.00

Trade Debt

$1,220,742.04

Trade Debt

$1,181,553.00

Notes

$1,100,000.00

Trade Debt

$1,004,290.00

Trade Debt

$978,307.78

000321

..

Applied Industrial
Technology

Diversified Energy Inc

Provident Mutual Life


Insurance Company
York County Natural
Gas
Cascades Sonoco Inc.

Ashland Herc:ules
Water Technologies

McAbee Construction
Inc.

Robm&Haas

Albany International
Corp.

The Franklirt Life


Insurance Company

Omnova Solutions

AI Krupa
One Applied Plaza
Cleveland, OH 44115
Fax: 216-426-4830
8874 Kingstone Pike, Suite 200
Knoxville, TN 37923
Fax: 865-691-4276
c/o The Bank of New York
P.O. Box 11203
New York, NY 10286
P.O. Box 11907
Rock Hill, se 29731-1907
Fax: 803-323-5401
170 Cleage Drive
Birmingham, AL 35217
Fax: 205-854-8308
Kim Anderson
5200 Blazer Parkway
Dublin, OH 43017
Fax: 614-790-4268
Gary Nicbols
P.O. Box 1460
Tuscaloosa, AL 35403
Fax: 205-758-0762
Kathy McCafferty
100 Independence Hall West
Philadelphia, PA 19106
Fax: 215-592-3726
Micbael J. Joyce
PO Box 1907
Albany, NY 12201-1907
Tel: 518-445-2244
Fax: 518-445-2264
c/o American General
Corporation
P.O. Box 3247
Houston, TX 77253-3247
Attn: Investment Research
Department A37-0l
KevinElia
175 Ghent Road
Akron, OH 49333
Fax: 330-869-4473

Trade Debt

$840,009.00

Trade Debt

$819,454.00

Notes

$800,000.00

Trade Debt

$677,105.00

Trade Debt

$676,767.00

Trade Debt

$489,236.00

Trade Debt

$465,505.00

Trade Debt

$443,268.00

Trade Debt

$406,448.00

Notes

$400,000.00

Trade Debt

$393,159.00

000322

(5) ... . .

. ,AmopntoL

claim(iL
se~ured

..

also .

.state value

secl)tity)3 .

of

$200,000.00

Process Equipment

Lancaster, PA 17604
Attn: Merleen Troutman
Fax: 717-295-2534
2770 Wellborn Street
P.O. Box 1607
Pelham, AL 35124
Fax: 205-663-6037

Trade Debt

$292,088.00

000323

IN THE UNITED STATES BANKRUPTCY COURT


FOR THE DISTRICT OF DELAWARE
)
)

In re:
ABITIBIBOWATER INC., et al., 1
Debtors.

)
)
)
)

Chapter 11
Case No. 09-11296 (KJC)
(Jointly Administered)

DECLARATION CONCERNING THE DEBTORS' CONSOLIDATED LIST OF


!CREDITORS HOLDING THE LARGEST UNSECURED CLAIMS
I, William G. Harvey, Senior Vice-President and Chief Financial Officer of
AbitibiBowa.ter Inc. ("AbitibiBowater" and with its subsidiaries and affiliates, the "Company"),
declare under penalty of perjury under the laws of the United States of America that I have
reviewed the foregoing Consolidated List of Creditors holding the largest unsecured claims
submitted herewith and that the information contained therein is true and correct to the best of
my information and belief.
Date: April 'H, 2009

_ ____

.......
William G. Harvey __,.
Senior Vice-Preside
d Chief Financial
Officer of AbitibiBowater Inc.

The debtors-in-possession in these cases, along with the last four digits of each Debtor's federal or Canadian tax
identification number, are: AbitibiBowater Inc. (6415), AbitibiBowater US Holding 1 Corp. (6050), AbitibiBowater
US Holding LLC (N/A), AbitibiBowater Canada Inc. (3225), Abitibi-Consolidated Alabama Corporation (4396),
Abitibi-Consolidated Corporation {9050), Abitibi-Consolidated Finance LP (4528), Abitibi Consolidated Sales
Corporation (7144), Alabama River Newsprint Company (7247), Augusta Woodlands, LLC (0999), Bowater
Alabama LLC (7106), Bowater America Inc. (8645), Bowater Canada Finance Corporation (8810), Bowater
Canadian Forest Products Inc. (20l0), Bowater Canadian Holdings Incorporated {6828), Bowater Canadian Limited
(7373), Bowater Finance Company Inc. (1715), Bowater Finance II LLC (7886), Bowater Incorporated (1803),
Bowater LaHave Corporation (5722), Bowater Maritimes Inc. {5684), Bowater Newsprint South LLC (1947),
Bowater Newsprint South Operations LLC (0186), Bowater Nuway Inc. {8073), Bowater Nuway Mid-States Inc.
(8290), Bowater South American Holdings Incorporated (N/A), Bowater Ventures Inc. (8343), Catawba Property
Holdings, LLC (N/A), Coosa Pines Golf Club Holdings LLC (8702), Donohue Corp. (9051 ), Lake Superior Forest
Products Inc. (9305) and Tenex Data Inc. (5913). The corporate headquarters ofthe debtors-in-possession is located
at, and the mailing address for each debtor-in-possession is, 1155 Metcalfe Street, Suite 800, Montreal, Quebec H3B
5H2, Canada.

DB02:8085992.1

068104.1001

000324

Neilson, David
From:
Sent:
To:
Cc:
Subject:

Vanstone, Melanie
April 22, 2009 4:49 PM
Mondou, lsabelle
Shuttle, Paul; Kaur Bhinder, Kiran

Importance:

High

s.23

FW:

s.21 (1 )(b)

Melanie Vanstone
Analyst I Analyste
Economic and Regional Development Policy I Politique du developpement economique et
regional Privy Council Office I Bureau du Conseil prive
85 Sparks Street I 85 rue Sparks
Ottawa, Ontario, KlA OA3
mvanstone@pco-bcp.gc.ca
telephone I telephone 613-957-5447
facsimile I telecopieur 613-957-5007
Government of Canada I Gouvernement du Canada

-----Original Message----From: IMCEAX400-c=CA+3Ba=govmt+2Ecanada+3Bp=gc+2Bdfait+2Emaeci+3Bs=Ready+3Bg=Robert+


3B@x400.pco [mailto:IMCEAX400-c=CA+3Ba=govmt+2Ecanada+3Bp=gc+2Bdfait+2Emaeci+3Bs=Ready+
3Bg=Robert+3B@x400.pco]
Sent: Wednesday, April 22, 2009 4:37 PM
To: IMCEAX400-c=CA+3Ba=govmt+2Ecanada+3Bp=gc+2Bdfait+2Emaeci+3Bs=Stephenson+3Bg=Don+
3B@x400.peo; IMCEAX400-c=CA+3Ba=govmt+2Ecanada+3Bp=gc+2Bdfait+2Emaeci+3Bs=Robertson+
3Bg=Paul+3B@x400.peo; IMCEAX400-c=CA+3Ba=govmt+2Ecanada+3Bp=gc+2Bdfait+2Emaeci+3Bs=Kronby+
3Bg=Matthew+3B@x400.pco; IMCEAX400-c=CA+3Ba=govmt+2Ecanada+3Bp=gc+2Bdfait+2Emaeci+
3Bs=Tabet+3Bg=Sylvie+3Bi=T+3B@x400.pco; IMCEAX400-c=CA+3Ba=govmt+2Ecanada+3Bp=gc+2Bdfait+
2Emaeci+3Bs=MacKay+3Bg=Vernon+3B@x400.pco; IMCEAX400-c=CA+3Ba=govmt+2Ecanada+3Bp=gc+
2Bdfait+2Emaeci+3Bs=Bernier+3Bg=Cynthia+3B@x400.pco; IMCEAX400-c=CA+3Ba=govmt+2Ecanada+
3Bp=gc+2Bdfait+2Emaeci+3Bs=Lapierre-Houssian+3Bg=Raphaelle+3B@x400.pco; IMCEAX400-c=CA+
3Ba=govmt+2Ecanada+3Bp=gc+2Bdfait+2Emaeci+3Bs=Trickey+3Bg=Mike+3B@x400.peo; Vanstone,
Melanie
Cc: IMCEAX400-c=ca+3Ba=govmt+2Ecanada+3Bp=gc+2Bdfait+2Emaeci+3Bs=beck+3Bg=stewart+
3B@x400.pco; IMCEAX400-c=CA+3Ba=govmt+2Ecanada+3Bp=gc+2Bdfait+2Emaeci+3Bs=Kamarianakis+
3Bg=Emmanuel+3B@x400.pco; Paquette, Jacques; IMCEAX400-c=CA+3Ba=govmt+2Ecanada+3Bp=gc+
2Bdfait+2Emaeci+3Bs=Levesque+3Bg=Louis+3B@x400.pco
Subject:
Importance: High

5.19(1)

s.21 (1 )(b)
s.23

000325

TBI/CMC - arateful if vou could dust off the Q and A and media lines and get them ready
for this. ,

Rob

5.21 (1 )(b)

000326

~OTICE

OF INTENT TO SUBMIT A CLAll\1 TO ARBITRATION UNDER

CHAPTER ELEVEN OF THE NORTH AMERICAN FREE TRADE AGREEMENT

ABITIBIBO\VATER I;o.;C.,
Investor,

v.
GOVERNMENT OF CAi"lADA,

Party.

Pursuant to Articles 1116, 1117, and 1119 of the North American .Free Trade Agreement
("NAFTA"), the disputing Investor, AbitibiBowater Inc. (hereinafter "AbitibiBowater" or "the

Company''), hereby respectfully serves a Notice oflntent to Submit a Claim to Arbitration for
breach by the Government of Canada (hereinafter "Canada"), through the actions of the
provincial Government ofi-Jewfoundland and Labrador, of its obligations under Chapter Eleven
ofNAFTi\. AbitibiBowater also hereby requests Canada and the Government of Newfoundland
and Labrador to begin fonnal consultations and negotiations, as contemplated by NAFTA Article
l l !8. in an effort to amicably resolve this dispute. Such consultations would be in accordance

with the Company's proactive outreach to fonn a joint working group to address and resolve all
issues related to its assets and rights in the Province of Newfoundland and Labrador.

000327

I.

TYPE OF CLAIM

1.

AbitibiBowater submits this Notice of Intent both under NAFTA Article 1116 as an
investor on its own behalf, and under NAFTA Article 1117 on behalf of three investment
enterprises that it owns or controls directly or indirectly: Abitibi-Consolidated Company
of Canada. Abitibi-Consolidated Inc. and AbitibiBowater Canada Inc. (hereinafter
!

collectively the ''AbitibiBowater Canadian Entities")_!

ll.

DISPUTING INVESTOR

2.

The disputing investor, AbitibiBowater Inc., is incorporated in the State of Delaware,


United States of America, and thus is an enterprise of a Party (the United States) pursuant
to NAFTA Article 1139. Its registered address is as follows:

1209 Orange Street


Wilmington, Delaware 19801
United States of America
Phone: 302-658-7581
Fax:
302-655-2480

Ill.

CLAIM BY A."'i INVESTOR OF A PARTY ON BEHALF OF AN ENTERPRISE

3.

AbitibiBowater owns or controls, directly or indirectly, the following Canadian


incorporated enterprises whose rights have been directly affected by acts for which Canada
is internationally responsible:
a.

b.
c.

Abitibi-Consolidated Company of Canada


Abitibi-Consolidated Inc.
AbitibiBowater Canada Inc.

Each of these AbitibiBowater Canadian entities has the following registered address:
1155 Metcalfe Street, Suite 800
Montreal, Quebec
Canada, H3B 5H2
Phone: 514-394-2160
Fax:
515-394-3644

000328

IV.

TYPE OF ll'VESTL\IENT

4.

This dispute involves the following types of investments, within the meaning of
"investment" defined in NAFTA Atiicle 1139:
a.

an enterprise;

b.

an equity security of an enterprise;

c.

an interest in an enterprise that entitles the owner to share in income or


profits of the enterprise;

d.

an interest in an enterprise that entitles the owner to share in the assets of


that enterprise on dissolution, other than a debt security or a loan;

e.

real estate or other property, tangible or intangible, acquired in the


expectation or used for the purpose of economic benefit or other business
purposes; and

f.

interests arising from the commitment of capital or other resources in the


territory of a Party to economic activity in such territory, such as under (i)
contracts involving the presence of an investor's property in the territory
of the Party, including turnkey or construction contracts, or concessions,
or (ii) contracts where remuneration depends substantially on the
production, revenues or profits of an enterprise.

V.

LEGAL REPRESENTATIVES AND SERVICE OF DOCUMENTS

5.

The following law fim1s are duly empowered to act on behalf of AbitibiBowater in this
matter, and correspondence should be served upon them at the addresses listed below:
a.

AR."i'OLD & PORTER LLP


555 Twelfth St., N.W.
Washington, D.C. 20004
United States of America
Phone:
202-942-5000
Fax:
202-942-5999
Michael T. Shor
Jean E. Kalicki
Annie Khalid Hussain

michaeLshor@aporter .corn
jean.kalicki@aporter.com
annie.khalid.hussain@aporter.com

000329

b.

OGILVY RENAULT LLP


1981 McGill College A venue, Suite 1 I 00
Montreal, Quebec
Canada H3A 3C 1
Phone:
514-848-4747
Fax:
514-286-5474
pbienvenu@ogilvyrenault.com
Pierre Bienvenu
mvalasek@ogilvyrcnault.com
Martin J. Valasek

45 O'Connor Street. Suite I 500


Ottawa, Ontario
Canada KIP 1A4
Phone:
613-780-8661
Fax:
613-230-5459
Paul D. Conlin
Alison G. Fitzgerald

c.

pconlin@ogilvyrenaul t. eom
afitzgerald@ogilvyrenaultcom

STEWART MCKELVEY
Suite 1100 - Cabot Place
100 New Gower Street
P.O. Box 5038
St. Johns NL AIC 5V3
Canada
Phone:
709-722-4270
709-722-4565
Fax:
Colm St. Roch Seviour
Maureen E. Ryan

cseviour@smss.com
mryan@smss.com

VI.

PROVISIONS OF NAFTA CHAPTER ELEVEN BREACHED

6.

Canada, through the actions of its constituent political subdivision the provincial
Government of Newfoundland and Labrador (hereinafter "the Province"). for which it is
internationally responsible, has breached its obligations under Section /\ of Chapter Eleven
ofNAFTA, including but not limited to the following provisions:

a.

Article 111 0 -- Expropriation and Compensation;

b.

Article 1105 -- ~1inimum Standard ofTreatment:

c.

Article 1102 -- National Treatment; and


4

000330

d.
7.

Article l 103 -- Most-Favored-Kation Treatment.

These provisions ofNAFTA state as follows:

Article 1110: Expropriation and Compensation


1.

No party may directly or indirectly nationalize or expropriate an


investment of an investor of another Party in its territory or take a measure
tantamount to nationalization or expropriation of such an investment
("expropriation"), except:
(a)

for a public purpose;

(b)

on a non-discriminatory basis;

(c)

in accordance with due process oflaw and Article 1105(1); and

(d)

on payment of compensation in accordance with paragraphs 2


through 6.

2.

Compensation shall be equivalent to the fair market value of the


expropriated investment immediately before the expropriation took place
("date of expropriation"), and shall not reflect any change in value
occurring because the intended expropriation had become known earlier.
Valuation criteria shall include going concern value, asset value including
declared tax value of tangible property, and other criteria, as appropriate,
to determine fair market value.

3.

Compensation shall be paid without delay and be fully realizable.

4.

If payment is made in a 07 currency, compensation shall include interest


at a commercially reasonable rate fi)r that currency from the date of
expropriation until the date of actual pay1nent.

5.

lf a Party elects to pay in a currency other than a 07 currency, the amount


paid on the date of payment, if converted into a G7 currency at the market
rate of exchange prevailing on that date, shall be no Jess than if the amount
of compensation owed on the date of expropriation had been converted
into that G7 currency at the market rate of exchange prevailing on that
date, and interest had accrued at a commercially reasonable rate for that
G7 currency from the date of expropriation until the date of payment.

6.

On payment, compensation shall be freely transferable as provided in


Article 1109.

7.

This Article does not apply to the issuance of compulsory licenses granted
in relation to intellectual property rights, or to the revocation, iimitation or
5

000331

creation of intellectual property rights, to the extent that such issuance,


revocation, limitation or creation is consistent with Chapter Seventeen
(Intellectual Property).
8.

For purposes of this Article and for greater certainty, a non-discriminatory


measure of general application shall not be considered a measure
tantamount to an expropriation of a debt security or loan covered by this
Chapter solely on the ground that the measure imposes costs on the debtor
that cause it to default on the debt.

Article 1105: .Minimum Standard of Treatment


1.

Each Party shall accord to investments of investors of another Party


treatment in accordance with international law, including fair and
equitable treatment and full protection and security.

2.

Without prejudice to paragraph 1 and notwithstanding Article 1108(7)(b),


each Party shall accord to investors of another Party, and to investments of
investors of another Party, non-discriminatory treatment with respect to
measures it adopts or maintains relating to losses suffered by investments
in its territory owing to armed conflict or civil strife.

3.

Paragraph 2 does not apply to existing measures relating to subsidies or


grants that would be inconsistent with Article 1102 but for Article
11 08(7)(b ).

Article 1102: National Treatment


1.

Each Party shall accord to investors of another Party treatment no less


favorable than that it accords, in like circumstances, to its own investors
with respect to the establishment, acquisition, expansion, management,
conduct, operation, and sale or other disposition of investments.

2.

Each Party shall accord to investments of investors of another Party


treatment no less favorable than that it accords, in like circumstances, to
investments of its own investors with respect to the establishment,
acquisition, expansion, management, conduct, operation, and sale or other
disposition of investments.

3.

The treatment accorded by a Party under paragraphs 1 and 2 means, with


respect to a state or province, treatment no less favorable than the most
favorable treatment accorded, in like circumstances, by that state or
province to investors, and to investments of investors, of the Party of
which it forms a part.

4.

For greater certainty, no Party may:

000332

(a)

impose on an investor of another Party a requirement that a


minimum level of equity in an enterprise in the territory of the Party
be held by its nationals, other than nominal qualifying shares for
directors or incorporators of corporations; or

(b)

require an investor of another Party, by reason of its nationality, to


sell or otherwise dispose of an investment in the territory of the
Party.

Article 1103: Most-Favored-Nation Treatment


1.

Each Party shall accord to investors of another Party treatment no less


favorable than that it accords, in like circumstances, to investors of any
other Party or of a non-Party with respect to the establishment, acquisition,
expansion, management, conduct, operation, and sale or other disposition
of investments.

2.

Each Party shall accord to investments of investors of another Party


treatment no less favorablc than that it accords, in like circumstances, to
investments of investors of any other Party or of a non-Party with respect
to the establishment, acquisition, expansion, management, conduct,
operation, and sale or other disposition of investments.

VII.

THE UNDERLYING FACTS

8.

This claim arises out of the arbitrary, discriminatory and illegal treatment of
AbitibiBowater under legislation enacted by the Province, expressly directed at the
expropriation of most of AbitibiBowater' s investments in Newfoundland and Labrador,
including their property and facilities and various vested rights and legal entitlements, and
the denial to AbitibiBm:vater of appropriate compensation and of the usual judicial avenues
oflegal redress. Canada is responsible for the Province's acts under NAFTA and
applicable principles of intemationallaw.

9.

On December 16, 2008, Bill 75, entitled "An Act to Return to the Crown Certain Rights
Relating to Timber and Water Use Vested in Abitibi-Consolidated and to Expropriate
Assets and Lands Associated With the Generation of Electricity Enabled by Those Water
Cse Rights'' (hereinafter the ''Abitibi-Consolidated Rights and Assets Act" or the

000333

"Act'') 1 was passed by the Newfoundland and Labrador House of Assembly and received
Royal Assent the same day. This Act, and related measures, are the subject of this claim.
By these measures the Province rejected the Company's requests to form a joint working
group to address cooperatively all issues related to its assets and rights in the Province.
Instead, the Province illegally expropriated AbitibiBowater's and the AbitibiBowater
Canadian Entities' investments, including their property and facilities and various vested
rights and legal entitlements, and unilaterally repudiated various agreements with the
AbitibiBowater Canadian Entities. As explained further below, this expropriation was
carried out without a valid public purpose, in a blatantly discriminatory fashion, without
the requisite due processl and without provision for the full and prompt compensation
required by NAFTA Article 1110 and applicable international law.
10.

The Act was also in breach of other NAFTA obligations, including Canada's obligation to
accord AbitibiBowater "treatment in accordance with international law, including fair and
equitable treatment and full protection and security" (Article 11 05) and its obligation to
accord AbitibiBowater "treatment no less favorable" than that it accords investors of
Canadian nationality or nationals of other States (Articles ll 02 and 11 03).

11.

These violations ofNAFTA are described more fully in Section VIII. First, this Section
VII describes the underlying facts, including:
(a)

an overview of AbitibiBowater, its rights and investments in the Province, and its
important contribution to the development oflocal communities over the last
century (Section VII.A);

A copy of the Act is attached as Exhibit A.

000334

(b)

AbitibiBowater's announcement in early December 2008 of the planned closure of


one of its interests in the Province, the pulp and paper mill in Grand Falls-Windsor
(hereinafter the "Grand Falls Mill"), as a result of an economic downturn and
market decline in the industry and the collapse of negotiations with the unions and
consultations with the Province over a renewal plan aimed at reducing operating
costs at the Mill (Section VII. B); and

(c)

the Province's precipitous decision, through the enactment ofthe Act, to strip
AbitibiBowater of most of its rights and interests in the Province, in retaliation for
its planned closure of the Grand Falls Mill (Section VII.C).

A.
12.

The Investor and Its Investment

AbitibiBowater is a limited liability company organized under the laws of the State of
Delaware, Cnited States of America. AbitibiBowater was created in 2007 through the
merger of two other forest products companies, the U.S. company Bowater Inc. and the
Canadian company Abitibi-Consolidated Inc.

13.

AbitibiBowater produces a wide range of newsprint, commercial printing papers, market


pulp and wood products. It is the eighth largest publicly traded pulp and paper
manufacturer in the world, measured by sales volume. AbitibiBowater owns or operates
25 pulp and paper facilities and 30 wood products facilities located in the United States,
Canada, the United Kingdom and South Korea. Marketing its products in more than 90
countries, the Company is also among the world's largest recyclers of old newspapers and
magazines, and has third-party certified I 00% of its managed woodlands to sustainable

fiJrest management standards. AbitibiBowater's shares trade under the stock s-vmbol ABH
~

on both the

~ew

York Stock Exchange and the Toronto Stock Exchange.

000335

14.

AbitibiBowater has been operating in Canada tor over a century, through its Canadian
subsidiaries (the AbitibiBowater Canadian Entities) and their predecessors. Aside from its
activities in Newfoundland and Labrador, AbitibiBowater also owns and/or operates
enterprises in other parts of Canada, including British Columbia, 1\e\v Bnms;,vick, Nova
Scotia, Ontruio, and Quebec.

15.

In Newfoundland and Labrador, AbitibiBowater holds a broad range of rights that can be
traced in part back to grants in various forms by the provincial government and its
predecessors and agents (such as the January 12, 1905 Charter Lease), but also in part to
other arm's length agreements made with private third parties, for which valuable
consideration was likewise given. TI1ese transactions provided AbitibiBowater with
extensive land rights, timber rights, water use rights and various other related rights,
established through a wide array of deeds, leases, casements and other contractual
agreements. AbitibiBowater's various rights are described in Section VIJ.A.l below.

16.

In addition to the substantial sums AbitibiBowater expended to acquire these various


rights, the Company invested many hundreds of millions of dollars more in the Province
over the course of the last century. These investments served as the catalyst for the birth
and development of communities throughout the Province, and reinforced the Company's
position as a good corporate citizen and strong local partner in the community since 1905.
Examples of these major investments are provided in Section VII.A.2 below.

17.

Based on these rights and investments, AbitibiBO\vater established, owned and operated
(with its partners) two major hydroelectric generation facilitiL>s in the Province, the Star
Lake Hydro Project and the Exploits River Hydro

Project~-

the latter encompassing both

the Bishop's Falls and Grand Falis generating facilities. AbitibiBowater also owned and

10

000336

operated a smaller hydroelectric generating facility in Buchans. These assets are described
in Section VII.A.J below.

(1)

18.

The Sources of AbitibiBowater's Rights

AbitibiBowater's involvement in the Province dates back to January 7, 1905, when its
predecessor the Anglo-Newfoundland Development Company, Limited (hereinafter
"ANDC") was incorporated as a N,ewfoundland corporation. ANDC wa<S incorporated
with a listed capital ofCDN $5 million, a vast sum at the turn ofthe 20th century,
equivalent to more than US $84 million in today's currency. 2 Its formation was the result
of a confluence of events and forces. The colonial Government of Newfoundland was
determined to attract industrial enterprises to the island, to expand the region's economic
base as its fishery industry collapsed and in the wake of a major fire causing losses above
CDN $20 million. 3 Kewfoundland heavily promoted its development efforts in the United
Kingdom, eventually catching the attention of the Hannsworth Brothers, publishers of the
Daily }\Iail and several other leading newspapers. Traditionally, the Harmsworths had

obtained pulp and newsprint from Scandinavia, but increasing worries about German
expansionism led them to look westward to North America for alternative supplies.
19.

The Hatmsworths entered into discussions with the colonial government in 1904 to acquire
the necessary lands and rights, and began also purchasing assets from other forestry
operators in arm's length transactions. From 1905 and over the next century,
AbitibiBowater and its predecessor companies including A.:\'DC (hereinafter referred to

: The 2008 values of historical investments included in this Notice of Intent were calculated using an inflation
cakulator t()r Canadian dollars available at http:.J\\<\vw.bankofcanada.caenrates:inflation_calc.html and a similar
..:alculator for U.S. dollars available at http::'. \nvw.westegg.comintlation. The resulting figures were converted to
U.S. dollars at the exchange rate prevailing on December 31, :;oos.
' Govemment of Canada, l'<e\\:fQ!!llQ131!!t.6!l!n!roduction to Cana.ilil_~<;_.li_ew Province. published by authority of the
Right Honourable C. D. Howe, ~inister of Trade and Commerce. prepared by the Department of External Affairs in
Cellabcratwn with the Dominion Bureau of Statistics, Ottawa, at page 29 ( 1950).

11

000337

collectively as "AbitibiBowater") made a broad range of significant investments in the


Province, acquiring numerous valuable rights and contributing significantly to the region's
economic development.
(a)

20.

The Charter Lease

AbitibiBowater's first significant transaction with the Province4 was the January 12, 1905,
Charter Lease ("Charter Lease"), a perpetually renewable 99-ycar lease of2,000 square
miles of surface, timber and water rights in the Exploits Rher watershed in the southwest
interior of the Province. The Charter Lease was issued by the Province and thereafter
ratified by legislation, the Pulp and Paper Act of June 15, 1905. Cnder the Charter Lease,
AbitibiBowater was required to pay the Province annual rentals and timber royalties,
which it has continued to do to this day.

21.

In addition to promising regular payment of rents and royalties, AbitibiBowater


covenanted in the Charter Lease to spend at least CDN $250,000 within four years of the
date of the Charter Lease, and a further CDN $750,000 within twenty-five years, in
connection with "the erection of one or more pulp and paper mills and their equipment,
including water power development, on or in connection with the demise<.! premises. " 5
There is no dispute that AbitibiBowater honored this commitment. In fact, during its first
five years of operation alone, AbitibiBowater invested more than CDN 56 million in the
colony ofNewfoundland, 6 a phenomenal sum at the time (equivalent to more than US

S101 million today) and many times the amount it was n..'quired to invest under the Charter
1

The term "Province"' in this Notice oflntent includes its predecessor cdonial and provincial governments. In 1905,
when A.c"DC commenced its pulp and paper business, Newfoundland was a colony of rlle l"niled Kingdom. It
remained thus until April l, 1949, when it joined Canada as a Province.
5
Charter Lease, Section 12.
6
Set: "Fiftv Years ofProgress at Grand Falls: The Impact of the. Anglo-Newfoundland De,clopment Company
Limited on the EconomY of ;..;ev.i'oundland,'' published by the Pulp and Paper :'v1agazinc of Canada... at Ill t. F. A
Price, ed., 1959).

12

000338

Lease. This massive investment by AbitibiBowater, which was merely the opening step in
an ongoing investment process that continued for another century, was instrumental in the
economic, social and sustainable development of the region, as discussed fu1iher in Section
VII.A.2 below.
22.

As part of the Charter Lease, AbitibiBowater surrendered to the Province certain


preexisting timber licenses and leases that it had acquired independently from other
forestry operators in arm's length transactions. For example, in 1905 AbitibiBowater had
acquired considerable timber holdings from Newfoundland Timber Estates, Limited, for
consideration of CDN $400,000, which in today's dollars would equate roughly to US
$6.75 million. The Charter Lease recitals refer to these and other valuable leases and
licenses acquired independently from "various parties." AbitibiBowater surrendered these
interests to the Province in connection with issuance of the Charter Lease.

23.

Notably, the surface, timber and water rights conferred by the Charter Lease were not
conditional on the continued operation ofthe planned paper mill at Grand Falls. Rather,
they were perpetually renewable as a matter of right, under Section l4(b ), which provided
that
the Government will, at the request and cost of the Lessee, at the
expiration of the term hereby granted and again at the expiration of every
further tem1 of ninety-nine years which may be hereinafter granted under
this covenant, grant to the Lessee at the same rents and royalties ... a new
lease of the demised premises together with all rights and privileges
hereby granted. 7

24.

Regarding water use rights. the Charter Lease stated as follo\vs:


The Lessee shall be entitled (so far as the Government can, consistently
with any grants heretofore made and actually subsisting grant the same)

Charter Lease, Section l4(b).

13

000339

to have, use and enjoy for its milling and logging business all streams,
lakes, watercourses, springs or water in, upon under or intersecting the
demised premises, and all water power or powers in and upon Exploits
River down to and excluding Bishops Falls and particularly, but not by
way of limitation, the entire water power of Grand Falls on said Exploits
River. 8
\Vhile the water use rights conferred by the Charter Lease may therefore appear to be usespecific, the qualification respecting "grants heretofore made" in the opening language of
the clause is significant. AbitibiBowater already had broad rights to all "water-courses" on
the lands at Grand Falls, without any conditions on use, through Reid Lot 59 (discussed
further in paragraph 27 below).
25.

The Grand Falls Mill was officially opened in 1909. The mill historically has been
powered by energy generated from the Bishop's Falls and Grand Falls hydroelectric
generation facilities. Both of these hydroelectric generating facilities arc located on the
Exploits River and form part of the Exploits River Hydro Assets, discussed further below.

26.

In late 2003, in anticipation of the expiry of the initial99-year term of the Charter Lease,
AbitibiBowater exercised its right to renew the lease. Despite initial verbal indications that
the Province would honor its renewal obligation, however, the Province ultimately
declined to do so. It insisted in writing that any renewal would have to be separately
negotiated -- on much more restrictive terms -- and issued under different legislation. The
Province nonetheless continued to acct.>pt rental and other payments trom AbitibiBowater
under the Charter Lease, indicating its tacit acknmvledgment of the Company's continuing
legal rights.

Charter Lease, Section 3 (emphasis added).

14

000340

(b)
27.

Other Land, Water and Timber Rights

Jndep~ndently of the Charter Lease, AbitibiBowater acquhed substantial other land, water
and timber rights in the Province, most of them from other forestry operators in arm's
length transactions for valuable consideration. For example, in addition to the timber
licenses and leases acquired independently in 1905 (discussed above in paragraph 22):
AbitibiBowater acquired from the Newfoundland Pine and Pulp Company
Limited, in 1911, its interest in a 999-year lease dated 1907 for five parcels
of timber tand (the ''1907 Lease'');

AbitibiBowater acquired, from the Albert E. Reed Company


(Newfoundland) Limited, in 1919, its interest in a 999-year grant dated 1907
of water use rights for Badger Brook, together '\.Vith lands for erection of
dams and associated control structures (the "Badger Brook Grant");

AbitibiBowater acquired, in the early 20th century, 33 additional nonrenewable timber licenses issued under the Crown Lands Act, originally
with variable expiry dates but later agreed to expire on December 31, 201 0
(hereinaft.er the "Non-Renewable Licenses");

AbitibiBowater acquired from the Reid Newfoundland Company, at various


times during the 201h century, substantial additional timber lands in 16
different freehold grants, specificaiiy including all the "water-courses" on
the lands, a term whlch conferred freehold water use rights (the "Private
Reid Lots"). 9 One of the Private Reid Lots, "Reid Lot 59,'' included the
lands on which the Grand Falls Mill >vas constructed, and the reference to
"water-courses" included that portion of the Exploits River which traversed
the Reid Lot 59 lands, including Grand Falls itself; 10
AbitibiBowater acquired from the Alexander Bay Pulp and Paper Company
Limited (in liquidation), in 1928, "the exclusive right to cut timber in and
over'' eight additional "Crown Reid Lots," until the expiration of a 99-year
tenn (subject to certain rights of renewal) that had started in 1919 with
original licenses made by the Reid Newfoundland Company;
AbitibiBowater acquired from the Bishop's Falls Pulp and Paper Company
Limited, in I 929, t\vo large freehold parcels of land on the Exploits River at

"While AbitibiBO\\ater had leased some of the Reid Lot lands as early as 1905, in return for rents and royalties (the
"1905 Reid Lease''), it later acquired full freehold interests in these lots through various deeds executed later in the
centurv. including in !962 and 1975 . .\1any of these transactions involved the paj111ent of valuable consideration to
Reid N~v, foundlantl Company.
AbitibiBowater acquired Reid Lor 59 in part by the 1905 Reid Lease. in part by a new deed in 1929, and in part by a
fun her ne.:r deed in l ?D. for valuable consideration.

15

000341

Bishop's Falls, together with the right to erect and maintain a dam (the
"Bishop's Falls Deed''). The Bishop's Falls Deed included '"the right to use
the waters of the said Exploits River at Bishop's Falls" for a 999-year term
beginning in 1907 ("Crown Grant ~o. 55," also known as the 'Bishop's
Falls Watcrpower Lease"); and

28.

AbitibiBowater also acquired, in the early 1930s, 20 additional parcels of


freehold land (known as the "Stock Pipe-Line Lands").

AbitibiBowater paid valuable consideration for these freehold, leasehold and license
timber rights acquired from third parties independent of the Charter Lease. For example,
Abitibi Bowater paid more than CON $2.5 million in 1929 (a sum exceeding US $24
million today) for the Bishop's Falls Deed.

29.

Notably, only a few of the many rights AbitibiBowater assembled during its century of
operations in the Province were even arguably conditioned on continued operation of the
Grand Falls Mill. The Non-Renewable Licenses admittedly depended on operation of at
least two paper-making machines at the Grand Falls Mill, and as to these licenses,
AbitibiBowater acknowledges that the closure of the Mill at the end ofl'Vlarch 2009 would
result in early termination, 21 months prior to the licenses' scheduled expiration. But most
of AbitibiBowater's other land, water and timber rights contained no such condition. As
discussed further in Section VII.C, the Province's attempt to expropriate almost all of
AbitibiBowater's rights, without any attention to their differing legal provisions, was thus
who11y arbitrary and indiscriminate.

(2)
30.

AbitibiBowater's Additional Investments in and Contributions to the


Province

In addition to the substantial amounts AbitibiBo\vater spent to acquire these various rights,
the Company invested enonnous sums in the Province over the course of the 1ast century.
These investments help place into context AbitibiBowater's broader involvement in the

16

000342

Province which, to the benefit of many hundreds of local employees, small businesses and
public authorities, has hardly been the kind of "one-way street" that Provincial authorities
later claimed to justify the sweeping expropriation of AbitibiBowater's rights ..
31.

Since 1996 alone, AbitibiBowater invested (or caused to be invested through its
partnerships) approximately CDN $145 million in the Grand Falls Mill and approximately
CDN $135 million in the hydro-electric projects. And these investments were simply the
latest in a long line of historical investments. For example, AbitibiBowater invested CDN
$50 million (worth somewhere in the range of US $300 million today) in modernization
and rehabilitation of Grand Falls Mill operations between the end of World War II and
1972, including conversion of the Bishop's Falls pulp and paper mill to a hydro-electric
generating facility and installation of a new paper machine. Between 1985 and 1995, the
Company made improvements valued at more than CDN $162 million (roughly US $185
million today), including among other things a new effluent treatment system and the
modernization of the wood-room. Over the next five years (1996-2000), AbitibiBowater
allotted more than CDN S97 million to additional improvements, including upgrade of
hydro-electric generation capabilities, pulping systems, computer systems, dams, and other
projects. The Company undertook CDN $25 million worth of further upgrades to the
Grand Falls Mill in 2005.

32.

AbitibiBowater's investments in the Province, over the last century, were instrumental in
building entire communities that had not existed prior to AbitibiBowater's arrival, and in
developing the institutions necessary to support community growth. Indeed, as a strong
local partner and corporate citizen, AbitibiBowater built the entire town of Crrand Falls. In
addition to its mill and hydroelectric operations, AbitibiBowater built and repaired roads

17

000343

and bridges on its timber lands, and replanted forest lands to ensure sustainability. In the
last five years alone, the Company spent more than CON $26 million on such
improvements, which the Province has now expropriated along with the lands on \Vhich
they lie.
33.

The Company contributed in numerous other ways to the local community to which it
belongs. Starting in 1909, it established a trust fund for the operation of the hospital and
schools in Grand Falls, and by 1929 AbitibiBowater had expended more than CDN
$100,000 (roughly US $1 million in 2008 dollars) on school construction. The Company
spent another CON $150,000 (also roughly US $1 million today) by 1950 on construction
of a new high school in Grand Falls.

11

AbitibiBowater allocated significant sums to

scholarship funds and other educational programs throughout the Province, and by 1967, it
was contributing more than CON $100,000 (approximately US $500,000 in 2008 dollars)
each year to education.

12

In recent years, AbitibiBowater has continued to support

education, for example donating CON $100,000 in 1997 to Memorial University of


Newfoundland's Opportunity Fund.

13

The Company also donated CON $650,000 in the

1980s (almost US $950,000 today) to help purchase new medical equipment for the
Central Newfoundland Regional Health facility in Grand Falls-Windsor, and another
$350,000 (more than CS $500,000 today) to purchase medical equipment for the hospital
in nearby Stephenville. These major monetary contributions do not begin to capture the

Grand Fails-\Vindsor Heritage Society Inc., Grand Falls- Windsor: The Place and Its People. published by
Transcontinental Community Newspapers, Gmnd falls- Windsor, NL, at 65 and 91 (2005).
l1 "Moby Joe: Commemorating the Official Opening of the -:\ew Machine Room Housing Price (Nfld.) Pulp & Paper
Limited's :\fodern High-Speed Paper 1\l.achine '\ioby Joe'," published by Price (Nt1d.J Pulp and Paper Limited.
unnumbered (1968).
"Abitibi-Price contributes $100,000 to \kmorial Lni\ crsitv's Opportuniry Ftrnd,"'
http: 1fwv.w .mun.caopfund:news4. html, 199" _

18

000344

Company's social commitment to its employees and the community, for example in annual
assistance grants to town-sponsored athletic and arts programs and local festivals.

(3)
34.

AbitibiBowater's Major Hydro Assets

Based on the rights and investments detailed above, AbitibiBowater established, owned
and operated (with its partners) two major hydroelectric generation facilities in the
Province, the Star Lake Hydro Project and the Exploits River Hydro Project, along with a
smaller hydroelectric generating facility in Buchans. Because these assets were captured
by the Province's sweeping expropriation, they are described below

(a)
35.

The Exploits River Hydro Assets

As discussed in paragraph 27, AbitibiBowater acquired title in 1929 to the land and water
rights at Bishop's Fails. From that year until 1951, AbitibiBowater' s dam and pulp mill at
Bishop's Falls supplied liquid pulp to the Grand Falls Mill. In the early 1930s,
AbitibiBowater partly converted the Bishop's Falls Mill to generate hydroelectricity, and
constructed a transmission line upon the Stock Pipe-Line Lands so the Mill could also be
supplied with energy generated by the Bishop's Falls power station. In 1951,
AbitibiBowater fully converted the Bishop's Falls plant to a hydroelectric generating
facility dedicated to the supply of energy to the Grand Falls Mill.

36.

AbitibiBowater's pulp and paper mill at Grand Falls continued to be powered principally
by energy generated from the Bishop's falls and Grand Falls hydroelectric generation
facilities, v,hich together form part of what is hereafter referred to as the "Exploits River
Hydto Assets: The rights structure for the Exploits River Hydro Assets is a complex one,
but the assets include among othcr things:

19

000345

37.

the Millertown dam (to which AbitibiBm,rater obtained rights in 1905);

the water use and hydroelectric generation rights at Grand Falls (which may
be traced to Reid Lot 59, the Charter Lease, and a 2002 water use license);

the Grand Falls power house and dam (which are located within Reid Lot
59);

the water use and hydroelectric generation rights at Bishop's Falls (which
can be traced to the Bishop's Falls Deed, including the Bishop's Falls
Waterpower Lease); and

the Bishop's Falls power house and dam (which rights were conferred by
the Bishop's Falls Deed).

In 2001, AbitibiBowater, together with Central Newfoundland Energy Inc. (a subsidiary of


Fortis Properties Corporation), fom1ed the Exploits River Hydro Partnership to finance and
develop the Exploits River Hydro Project, a 31 megawatt upgrading of the Exploits River
Hydro Assets. The Exploits River Hydro Project was constructed at a capital and start-up
cost ofCDN $74 mil1ion and was commissioned in 2003. Since the commissioning, and
pursuant to a 2001 power purchase agreement with 1\'ewfoundland and Labrador Hydro,
the first 54 megawatts of power generated by the Exploits River Hydro Assets have been
supplied to the Grand falls Mill, with AbitibiBowater supplying the incremental power
generated above that level to the provincial power grid.

38.

In addition to its substantial ownership interest in the Partnership itself: AbitibiBowater


was entitled to payment from the Partnership for the use of various rights and assets. For
example, under the Exploits River Hydro Partnership Lease and Easement of2002,
AbitibiBowater was entitled to receive an adjustable base rental of CDN S800.000 per year
for lease and casement rights respecting the Exploits River Hydro Assets, Cnder the
Restated Operati0ns and

~1aintenance

Agreement of2002. AbitibiBowatcr vvas entitled to

receive an adjustable base tee ofCDN $250,000 per year from the Exploits River Hydro

20

000346

Partnership. These income streams fanned an additional part of the value of


AbitibiBowater's investment, which has now been expropriated.
(b)

39.

The Star Lake Hydro Assets

In 1997, together with CHI Hydroelectric Company Inc. (a subsidiary of Enel SpA),
AbitibiBowater formed the Star Lake Hydro Partnership to develop and construct the Star
Lake Project, a 15 megawatt hydroelectric generation project located in western
Newfoundland and Labrador. The Star Lake Project was constructed at a capital cost of
CON $59 million, in response to a request for proposals for the supply of power to the

provincial power grid. Since its commissioning in 1998, the Project has continued to
provide power to the Province, pursuant to a power purchase agreement with
~ewfoundland

40.

and Labrador Hydro.

Prior to passage of the Act, Abitibi-Consolidated Company of Canada had, with the
Government's knowledge, entered into an agreement to sell its interest in the Star Lake
Project to its partner Enel Atlantic Canada Limited Partnership ("Enel"), for net proceeds
of CDN S26 million. It did so after rejecting a lower offer from the Province for these
assets. The Province has now obtained through legislation what it unsuccessfuHy sought
earlier through a commercial negotiation. The Enel transaction has been thrown into
tumwil by the ;\.et's expropriation ofAbitibiBowater's rights in the Star Lake Hydro
Assets.
(c)

41.

Tbe Bucbans Hydro Assets

In addition to its interest in the Exploits River Hydro Assets and the Star Lake Hydro
Assets, AbitibiBowater also had land and water use interests in a I .8 megawatt
hydroelectric generating facility and associated infrastructure and water rights in Buchans

21

000347

(the "Buchans Hydro Assets"). AbitibiBowater's rights in the Buchans area derived from
the Charter Lease, and have also been expropriated by the Act.
B.
42.

The Planned Closure of the Grand Falls Mill

The pulp and paper industry has been enduring difficult times as a result of declining
newsprint demand and high delivery costs, a problem not unique to AbitibiBowater.
According to a recent report commissioned by the Province, North American newsprint
demand has declined by almost five million tonnes (or almost 40%) since 2000, as the
newspaper industry struggles to compete against the Intemct. In the intemational markets
traditionally served by the Grand Falls Mill, demand all but tlattened in the same period. 14
In the last quarter of 2008, demand fell even further, and expectations for 2009 are for
continued reductions in worldwide and North American demand.

43.

AbitibiBowater's global operations have been devastated by these trends. In 2007,


AbitibiBowater suffered operating losses of some US $400 million.

44.

The Company has been proactive in managing this crisis. In late 2007, one month after
completing the merger, AbitibiBowater announced "Phase 1" of an action plan to address
Company challenges, including reduction of paper production capacity by 1 million metric
tonnes during the first quarter of2008. Phase 1 involved the pennanent closure of several
mills, as well as the indefinite idling of others, among other initiatives. AbitibiBowater
announced that it would undertake a comprehensive "Phase 2" review of all aspects of its
business to further reduce costs. 15

4
: "Provincial Report Forecast Paper ~1ill Closure," http:i'www.theielegram.comindex.cfm?sid~,205435&sc'~82, 30
December 2008 (discussing November 2008 report on the Newfoundland Forest Sector Strategy, submitted to the
Province by the Nova Scotia-based management consulting firm Halifax Global).
; "AbitibiBowater Announces Phase l of Action Plan to Address Company Challenges."' AbitibiBowater L1test Ne\vs
(Nov. 29, 2007), http:iiwww.abitibibowater.com media latest-news.aspx?id~,636&detail"tme&reqidc' I! 082781.

22

000348

45.

As part of the comprehensive Phase 2 review, attention turned to the Grand Falls Mill,
where the consequences of the industry downturn have been particularly severe. The Mill
had the highest labor costs of any of AbitibiBowater's operations worldwide. This fact,
coupled with industry-\vide trends of declining North American demand and rising
competition on international markets from several Nmih American mills, meant that the
Grand Falls Mill had to reduce costs to stay competitive and remain in operation.

46.

In response to these economic realities, and in conjunction \Vith the broader review of
AbitibiBowater's assets worldwide, AbitibiBowater management devised an economic and
structural renewal plan for the Grand Falls Mill, to provide it with a more sustainable
future through an improved competitive status. The Company consulted regularly with
provincial government officials about the renewal plan and a range of other issues, and
also negotiated directly with the Province about a possible sale of certain AbitibiBowater
surface rights to obtain additional capital for significant re-investment in the Grand Falls
Mill. subject to reaching agreement with the employees on a new operating model.

4 7.

Meanwhile, AbitibiBowater management launched extensive negotiations with union


representatives and other local interests, to try to reach agreement on the cost cuts and
other initiatives necessary to make the Mill competitive on a long term basis. The
Company held many dozens of meetings with union representatives, over a period of more
than three months in 2008. Unfortunately, the outcome of the negotiations was
unsucc.essful: members of the unions voted ovenvhelmingly against the Company's
restructuring proposals, in September 2008 and again in November 2008. The votes were
in stark contrast to the approach of union members at other AbitibiBowater facilities in
Canada, who generally supported the Company's rene\val efforts and worked

23

000349

constructively with management to adopt changes that improved the competitiveness of


their respective operations.
48.

Despite its aggressive efforts during 2008 to manage the impacts of a devastating
economic and market environment, the Company's fortunes continued to fall, due to the
volatility in exchange rates, energy and fiber pricing, as well as structural challenges and
declining consumption in the North American newsprint industry. In the first three
quarters of2008, AbitibiBowater suffered further operating losses of some US $371
million. The Company's stock fell by 96% in 2008,

16

and in December of2008, the New

York Stock Exchange warned AbitibiBowater of a possible delisting, because its shares
had traded for less than an average of one dollar fbr thirty consecutive days. 17
49.

On December 4, 2008, AbitibiBowater reluctantly announced a further action plan to


address continuing economic and market challenges. The Company announced that it
would be cutting its North American production through several steps, most of them
involving operations in the United States. In addition to the permanent closure of the
Grand Falls Mill at the end ofMarch 2009, AbitibiBowater announced the permanent
closure of a facility in Covington, Tennessee, along with the immediate idling of an
Alabama newsprint mill and of two paper machines in Calhoun, Tennessee.
AbitibiBowater also announced a program of rolling downtime at other facilities across the
organization until market conditions improved. President and Chief Executive Officer
David J. Paterson noted that "[s]takeholders made efforts to dewlop viable solutions to

16
See http:, 'stocks.forbes,com stocks: ABH; compare "US voices concern ever Canadian expropriation,"' Yahoe'
Finance, December 22,2008 (suggesting 2008 decline of9"%):
http:Fwww.bloomberg.com'apps/new<.?pid newsarchiw&sid"'a2f3LgkfzJ\'M (suggesting shan~s ha'\C tallen 99~;,),
;c Christopher Donville and Sarah Rabil, ''AbitibiBowatcr aims to Refinance Debt in Early 2009," available at
http:, ,'www.bloomberg.com:apps news?pid ne\vsarchive&sid"a2f3LgkfzJVM.

24

000350

keep these operations running, however, after careful deliberation, these decisions were
necessary given cuiTent market and economic realities.'' 18
50.

The decision to dose the Grand Falls Mill was thus not taken lightly. AbitibiBowater
management would have preferred to try to save the plant, had that been genuinely
feasible. But lacking any meaningful progress in reshaping the mill's fundamental
economics. the Company ultimately opted to close the Mill. This \Vas not, however, a sign
of withdrawal from the Canadian marketplace. AbitibiBowater remains committed to
maintaining economically viable operations in Canada.

51.

AbitibiBowater did not just announce the closures and \valk away from the communities
that it had helped build. Instead, as Mr. Paterson emphasized in his December 4, 2008
announcement, the Company was committed to "make every effort to help mitigate the
effects of these capacity reductions, as we are mindful of the impact they will have on
affected employees and communities.'" 9 In furtherance of this objective, AbitibiBowater
management reached out to provincial officials the very day of the announcement, to
propose the fonnation of a collaborative working group to address all issues arising from
the planned closure and the Company's overall presence in the Province. The Company's
outreach demonstrates that the public interest could have been served by cooperative
discussions. Instead, the Province opted for unilateral action, in violation of Canada's
clear obligations to AbitibiBm.vater under I\AFTA.

'' ",\bitibiBowatcr .\nnounces Action Plan to :\ddress \farket Challenges." AbitibiBowatcr Latest };ews (Dec 4,
2008 ), http:. "NV..~.v.abitibibowater.com media: latest-ne\V:>.a.<;px?id~,636&detail~'true&reqi&~ 123 2536,
Id.

000351

C.

52.

The Abitibi-Consolidated Rights and Assets Act

Provincial authorities wasted no time in penalizing AbitibiBowater for its closure of the
Grand Falls Mill. The same day the company announced the closure and approached
officials about forming a joint working group, the Province's deputy premier rejected this
outreach, and declared instead that the Province would attempt to expropriate
AbitibiBowater's hydro and timber rights. 20

53.

Then, on Friday December 12, 2008 -- a mere week after the Company announced the
planned closure -- Minister Kathy Dunderdalc faxed a letter to AbitibiBowater after
business hours, demanding that the Company ~(orthwith surrender to the Province its
entitlement to (the Province's natural] resources." The letter was not an invitation to
discussions; it was an ultimatum. Minister Dunderdale demanded to receive written
confirmation of AbitibiBowater's intentions to surrender all of its natural resource interests
within three days, i.e., "by noon of 15 December 2008."21 Since the letter was delivered
after business hours on a Friday, without any early notice, this meant that the response was
due by noon the very next business day. AbitibiBowater responded on Monday December
15, 2008, reiterating its request to establish a joint working group to address issues related
to the Mill closure and the Company's overall presence in the Province.

54.

AbitibiBowater's sensible proposal was ignored. Instead, on December 16, 2008 --the day
after the "high noon" ultimatum expired -- the Province hastily enacted the Act, \Vithout
any attempt to consult with AbitibiBowater and without any public hearings or other
responsible policy dialogue and review. Premier Danny Williams issued a numberof

:~ ":.i.L. to expropriate Abitibi assets in the proYince." Yahoo! Canada Finance. December 16. 2008.

: Letter from Kathy Dunderdale, Minister, Department of Natural Resources. Government of Newfoundland and
Labrador, to Pierre Rougcau, Senior VP !'\orth American Newsprint AbitibiBowater, December ! 2. ::nog {emphasis
added).

26

000352

statements to the press, articulating three basic justifications for the Province's precipitous
act.
55.

First. Premier Williams expressed conccm about the impact of the Grand Falls Mill closure
on the local workforce. He has not explained how expropriation of AbitibiBowater's other
investments in the Province would serve a goal of protecting jobs, nor has the Province to
this day announced any plans to save the Mill or to create jobs for former mill workers. To
the contrary, while the Act expropriated most of AbitibiBowater's other interests in the
Province, it did not expropriate the Grand Falls Mill. The Province's cherry picking of
valuable resources, while providing no plan whatsoever with respect to the Mill or its
\'\orkforce, cannot even arguably be justified by a rationale of job protection. The realities
of the Act are thus starkly in contrast with Premier Williams' professed concem for the
Grand Falls community. The Act in no way served the public interest.

56.

Second, Premier Williams accused AbitibiBowater of breaking an alleged "covenant"


between AbitibiBowatcr and the Province, in which the Company's entitlement to enjoy its
accumulated investments, rights and interests was supposedly contingent on perpetual
operation of the Grand Falls Mill.

22

Premier Williarns did not point to any particular legal

provisions supposedly demonstrating this covenant, except for one passage in Section 3 of
the Charter Lease. But the issue is not as simple as pointing to one interpretation of a
single line in a document prepared by a colonial government over 100 years ago. As
discussed above, even that passage~~ which did not on its face state any dear conditions
on use-- acknowledged that AbitibiBowater's predecessor had significant grants prior to
the Charter Lease, \:vhich were not even arguably tied to mill operations. :\1oreover,

" .. Abitlbi Yrms :--:AFT:\ !aA-suit: ThcStaLcom. December 20. 200li. http: ww'.v.thestar.comarticle/556699.

000353

AbitibiBowater's rights in the Province were based on much more than just the Charter
Lease. As demonstrated in Section VII. A above, they rested on a wide array of other
deeds, leases, licenses and contracts, the vast majority of which in no way were
conditioned on Grand Falls Mill operations. The Act was therefore fatally overbroad,
according to Premier Williams' own stated rationale.
57.

Third, Premier Williams trumpeted the Act's importance in returning natural resources to
provincial management and control. "[F]inally lands that had been ours <md had been
given away are back," he said, "back in our hands where they belong, in the hands of the
people ofthe province."23 But the Act did not reflect any kind of grand policy scheme for
centralizing timber, land and water a.<;sets in government h<mds. Other private companies
operating in the Province continue to enjoy valuable deeds, leases and licenses involving
natural resources. The Act simply singled out one such company for retaliatory
expropriation, and dressed up its punitive actions with populist rhetoric designed to loosely
suggest (but not really reflect) rational public policy goals.

58.

The real motivation, and the real consequence of the Act, was simple. It was to kick a
single foreign investor out of the Province, because that investor had angered Premier
Williams tmd some of his constituents. As Premier Williams announced to the press, upon
the passage of the Act, "we're willing to tell [AbitibiBowater\ to go and do their business
in other parts of the country and other parts of the world. "

59.

24

The scope of the Act was sweeping. 1t efiected the immediate expropriation of most of
AbitibiBowater interests in the Province, except the Grand Falls Mlll itself, including not

2
'

"N.L. to expropriate Abitibi assets in the pro\ inec," Yahoo' Canada Finance. December 16. 2(l0g.
'"\.Ve v.ish you well': \Villiams to AbitibiBowater, CBC Ne.vs. last updated Dec. 1~. 2008,
http:.;\vww.cbc.cacanadainev.:foundland-labrador story2008 !2/1" williamsabitibi.html?ref'rss&lomnia_si'tO:al6:gh4:c0.10 1616:b20263633 (emphasis added)~

28

000354

only interests originally granted by provincial authorities, but also interests obtained from
third parties in arm's length transactions for valuable consideration.
60.

To begin, Section 3 of the Act (and its Schedule A) terminates the AbitibiBowater
Canadian Entities' ''timber rights and rights to lands" in the Province, and provides for the
reversion of such rights and lands to the Province. 25 With the exception of the NonRenewable Licenses, none ofthe timber lands grants, leases and licenses expropriated
through the Act were conditional upon AbitibiBowater's operation ofthe Grand Falls Mill.

61.

Section 4 of the Act (and its Schedule B) expropriates the AbitibiBowater Canadian
6

Entities' water use rights in the Province.Z The expropriation fundamentally undercuts
both the Exploits River Hydro Project and the Star Lake Hydro Project, which depended
on continuation of these rights. None of the expropriated water rights was conditional
upon AbitibiBowater's continued operation of the Grand Falls Mill or the use of its timber
holdings in the Province.
62.

Section 5 of the Act (and its Schedule C) expropriates the AbitibiBowater Canadian
Entities' lands and assets associated with hydroelectric generation in the Province,
including all of AbitibiBowater's interests in the Exploits River Hydro Assets and the Star
Lake Hydro Assets.

27

~otably, since it was commissioned, the Star Lake Project has

provided power to the Province's power grid only and not to the Grand Falls MilL but this
fact did not spare it from seizure by the Province.
;~s This included the 1907 Lease. the Non-Renewable Licenses. the various Private Reid Lots, the Crown Reid Lots,
and three other Special Leases, Grants, which included lands located in the vicinity of Red Indian Lake and Exploits
River.
This included three Water Cse Licenses, Crov.n Grant No. 55 (the Bishop's Falls Waterpower Lease), the Final
\Vater Power License, and the water use rights conferred by Reid Lot 59, which included all water-courses pertaining
to the lands at Grand Falls.
27
Sched:Ile C also expropriated AbitibiBowater's interests in the MillertO\~n Dam, the Grand Falls poxer plant and
dam, the Bi:--hop's Falls po>ver house and dam, the Star Lake power plant and dam, the Buchans power plant and dam,
and the infrastructure associated ,\ith all of these pr<>JCC!s, including numerous control structures.

29

000355

63.

Section 6 of the Act (and its Schedule D) expropriates casements in favor of the
AbitibiBowater Canadian Entities in the Province.

64.

28

Section 7 of the Act (and its Schedule E) unilaterally repudiates various agreements
between the Province and its agent the Newfoundland and Labrador Hydro Corporation,
and AbitibiBowater and other interested parties. 29

65.

Section 8 of the Act revokes the 1905 Charter Lease and repeals the 1905 Pulp and Paper
Act, expropriating all lands, timber and water rights granted under them. Yet nothing in
the Charter Lease or the Pulp and Paper Act makes these rights conditional on continued
operation of the Grand Falls Mill. To the contrary, Section 14(b) of the Charter Lease
makes them renewable as a matter of right.

66.

Section 14 of the Act grants full discretion to the Lieutenant Governor in Council, for all of
the many AbitibiBowater rights expropriated by the Act, to "issue a license or other
permission," under whatever "terms and conditions that it sees fit," to any other third party
"for the occupation, use, access to or another right" associated with assets that until
recently belonged to AbitibiBowater. The Province has reportedly transferred many of
these valuable rights and interests to its own recently established Crown corporation,
Nalcor Energy. Of course, the Province in future may attempt to sell off these Yaluable
rights to third parties -- essentially allowing it to arrogate to itself the very benefits for
which AbitibiBowater already paid valuable consideration, in earlier transactions with the
Pro\'ince or with independent third parties.

2
g This included AbitibiBowater's transmission lines for the hydroelectric generating projects owned by the Exploits
River Hydro Partnership (the Bishop's Falls-Grand Falls transmi.s:;ion line) m1d by the Star Lake Hydro Partnership
(Easement No. 111480), in each of whkh AbitibiBowater is a partner.
29
This included a number of agreements involving the Exploits Riwr Hydro Project and the Star Lake Hydro Projt~ct.
including their respective power purchase agreements with "iewfcundland and Labrador Hydro.

30

000356

67.

Section 13 of the Act purports to impose continuing liabilities on the AbitibiBowater


Canadian Entities for environmental remediation on the expropriated properties. The Act
does not explain how AbitibiBowater is expected to fulfill these responsibilities at sites
that it no longer owns, controls or is allowed to access.

68.

Section 9 of the Act unilaterally extinguishes a pending lawsuit by Abitibi-Consolidated

Inc. and Abitibi-Consolidated Company of Canada against the Province (Action 2003 OlT
No. 2113). 30 The Province was evidently unwilling to allow the courts to decide whether
AbitibiBowater's position in the pending lawsuit was conect or not. Through the self-help
of discontinuing the judicial inquiry by legislative fiat, the Province has ensured that it
wins no matter what.
69.

Section 11 of the Act demonstrates an even more sweeping disregard for due process and
the right to be fairly heard in courts of law. The provision on its face bars AbitibiBowater
from bringing any action or proceeding against the Province, resulting from or incidental
to the Act's operation. In other words, the Province purports to shield itself, unilaterally,
from any judicial review of its actions. At the same time, it singles out AbitibiBowater -and no other investors in the Province -- for the unprecedented penalty of preclusion from
any access to the courts.

70.

Section 10 of the Act purports to exclude any possibility of compensation tor


AbitibiBowater for the mynad cxpropriations suffered under the Act, with one minor
exception. The Province appears to have intended to grant the Lieutenant-Governor in

;o In this pending ""\Vater Rights" litigation, the AbitibiBowater Canadian Entities contended that the Province had
improperly required them to obtain additional Warer Use Licenses in connection with the Exploits River Hydro
Project even though AbitibiBowater already held sufficient water use rights for the Project under the Bishop's Falls
\VatcrpNH:r Lease, Reid Lot 59 and the Charter Lease. The AbitibiBowater Companies argued that by reason of the
Province's position, the Exploits River Hydro Partnership had unnecessarily incurred additional water use fees of
appr0ximately CD,'; S 150.000 per year. which fees hav.e been paid since 2003.

31

000357

Council the discretion to pay compensation to AbitibiBowater for the expropriation of the
Hydro Generation Properties under Schedule C, but for none of the assets, rights or
entitlements expropriated under any of the other schedules to the Act. As to the hydro
assets in Schedule C, the amount of compensation appears intended to be entirely
discretionary, not bounded by any principles of law or conventional valuation. As Premier
Wil1iams announced to the press, "[i]fthere's no agreement [on valuation], we will in fact
impose an agreement. ... Under the legislation, cabinet will have the power to say, 'Here's
the formula, here's what the compensation is, here's your check. '" 31 AbitibiBowater's
rights to fair compensation are thus entirely subordinated to the political will of the
Province-- and Premier Williarns has made clear what he considers to be a fair valuation.
The "honourable thing," Premier Williams stated publicly, would have been for the
Company to have handed over all of its assets "free of charge."32
71.

As of this date, no compensation whatsoever has been paid to AbitibiBowater or the


AbitibiBowater Canadian Entities.

VIII. THE VIOLATIONS OF NAFf A CHAPTER ELEVEN


72.

Canada, through the actions of the Province, is responsible for measures inconsistent with
its commitments under NAFTA Chapter Eleven. These measures clearly breach its
obligations under Article 1110 (Expropriation and Compensation), as well as Articles 1105
(Minimum Standard ofTreatment), 1102 (National Treatment), and 1103 (\-!ostFavored
Nation Treatment).

'' AbitibiBov.ater vows to defend Canadian assets;' Yahoo! Finance. December J "'. 2008.
"\Villiams shrugs off any Abitibi challenge." Globe and Mail, December 17. 2008.

32

32

000358

73.

By reason of Canada's breach of its obligations, AbitibiBowater, an investor of a Party as


defined in Section C ofNAFTA Chapter Eleven, has incurred damages in relation to the
AbitibiBowater Canadian Entities, investments of AbitibiBowater as defined in Section C
of Chapter Eleven. Hence, AbitibiBowater must be compensated for Canada's failure to
comply with its obligations arising under NAFTA Chapter Eleven.

74.

The particular NAFT A breaches are detailed below.

A.

75.

Canada's Breach of Obligations Under Article 1110 -- Expropriation

NAFTA Article 11 10 prohibits Canada from directly or indirectly nationalizing or


expropriating the investments of a U.S. company in its territory, except (a) for a public
purpose; (b) on a non-discriminatory basis; (c) in accordance with due process oflaw and
the minimum standard of treatment under international law; and (d) on pa)'ment of
compensation.

76.

Canada, through the Province, has clearly violated its obligations under NAFTA Article
1110 by enacting legislation that (a) provides explicitly for the direct expropriation of an
extensive list of important rights, assets, licenses, and other interests held by
AbitibiBowater in the Province through its Canadian subsidiaries, as detailed above, but

(b) does not meet any of the criteria specified under Article 1110 for such expropriations to
be lawful.
, ;.

First, there exists no valid public purpose for the expropriation. As detailed above in
Section Vfi.C, none of the Province's stated rationales can even arguably explain its
actions. Premier Williams has referred to the job losses occasioned by closure of the
Grand Falls :V fill, but the Act does nothing to protect jobs at the Mill or in the surrounding
community. Premier Williams has invoked a supposed "covenant" between
33

000359

AbitibiBowater and the Province, but in fact, most of the rights expropriated by the Act
were in no way conditioned on continued operation of the Grand Falls Mill. Premier
Williams has also invoked the Province's right to control natural resources, but the Act
was not part of any overarching policy initiative designed to repudiate all private use of
such resources. To the contrary, its careful targeting of the rights of only one investor
suggest that the true motivations of the Province were political and punitive, not based on
rational public policy at all.
78.

Second, the expropriation was discriminatory. On its face, the Act expropriates the rights
and assets of a single investor, even though other investors in the Province have also been
forced to shut down operations in hard economic times. The Province has publicly stated
that AbitibiBowater's business partners and lendt-'fS will be compensatt--d for the
consequential hardships befalling them, 33 while offering no parallel compensation to
AbitibiBowater. And the Act singles out AbitibiBowater for preclusion from the courts,
leaving all other investors in the Province fully entitled to judicial review of their
grievances while denying the same rights to AbitibiBowater.

79.

Third, the expropriation violates international standards of due process. The legislation
appears to have been rushed through parliamentary processes in a single day, vvithout
meaningful prior consultation with AbitibiBowater and in total disregard of the Company's
proactive outreach to try to resolve jointly \vith the Province all issues related to its assets,
rights and interests. Indeed. the only attempt by the Province to communicate with
AbitibiBowater, before stripping it of most of its rights, was an ultimatum providing
AbitibiBowater with a vveekend in which to voluntarily "surrender" precisely the same

.cJ ..Nev.rfoundland

to Expropriate Hydro and Trees from AbitibiBowater,"' NewNews!edger.com. !6 Detember 2008.

34

000360

rights. The authoritarian nature of this ultimatum and the subsequent legislation is
reminiscent of much less democratic systems elsewhere in the world. The Province's
unilateral decision to strip AbitibiBowater of its right to access the courts, while
terminating a pending case, similarly makes a mockery of any notion of due process.
80.

Finally, the Act does not even remotely comply with the full compensation requirements of
NAFTA Article 1110. That Article requires that such compensation be "equivalent to the
fair market value of the expropriated investment immediately before the expropriation took
place." Article 10 of the Act clearly violates this "fair market value" compensation
requirement, by purporting to authorize compensation limited on its face to certain
hydroelectric assets and by providing no compensation \vhatsoever for the confiscation of
AbitibiBowater's other rights and assets. Even with respect to the hydroelectric assets, the
Act leaves compensation detennination and timing entirely to the discretion of the
Lieutenant-Governor in Council, which violates NAFTA Article 1110(3)'s requirements of
payment "without delay" by valuation standards recognized under international law and
"fully realizable."

81.

There is no question, under these circumstances, that the expropriations effected by the Act
are illegal under NAFTA Article 1110. This iJlegal expropriation entitles AbitibiBowater
to full reparation for its losses, including (a) restitution of the assets expropriated or
compensation at their fair market value, as well as (b) pa}1nent of any additional
consequential damages suffered as a result of the Province's illegal actions.

35

000361

B.

82.

Canada's Breach of Obligations Under Article 1105 ~ l\1inimum Standard of


Treatment

NAFT A Article 11 05( 1) obliges Canada to "accord to investments of investors of another


Party treatment in accordance with international law, including fair and equitable treatment
and full protection and security."

83.

The Act's seizure of AbitibiBowater's timber, water, land and other contractual rights
violates the ptinciple of fair and equitable treatment under Article 1105. As detailed
above, the illegal expropriation under the Act clearly was arbitrary, irrational and
discriminatory, in violation of AbitibiBowater' s legitimate expectations of a stable
business and legal environment and of equal treatment vis~a-vis other investors. It was
accompanied by a textbook "denial ofjustice" (the preclusion of all access to the courts),
which qualifies as a further violation of the principle of fair and equitable treatment
included in Article 1105. The "full protection and security" requirement of Article ll 05( 1)
likewise includes basic requirements oflegal security and access to the courts.

C.

84.

Canada's Breach of Obligations Under Articles t 102 and t 103 --National


Treatment and Most-Favored Nation Treatment

NAFTA Chapter Eleven prohibits discrimination against investors of the other State
Parties, vis-a-vis both nationals or investors of other States. Under Article 11 02(2),
"[ e}aeh Party shall accord to investments of investors of another Party treatment no less
favorable than it accords, in like circumstances, to investments of its o\vn investors \Vith
respect to the establishment, acquisition, expansion, management, conduct, operation, and
sale or other disposition of investments." The same principle is found in Article 11 03(2),
but in reference to "inwstment of investors of any other Party or of a non-Party.''

36

000362

85.

In etfect, these NAFTA provisions make it illegal for Canada, through the Province, to
discriminate against a U.S. investor's activities in Canada, whether by comparison to a
local investor or to an investor from any other country. The Act undoubtedly breaches
NAFTA 's non-discrimination guarantees, by explicitly targeting and singling out the
Canadian operations of AbitibiBowatcr, a single foreign investor, rather than serving as a
measure of general applicability. Although the Province may have a right under NAFTA
to expropriate in the public good subject to certain conditions, it cannot discriminate as
between the owners of such assets by unilaterally imposing acts of retaliation on one
investor, while treating other investors more favorably. Certainly, the Grand Falls Mill is
not the first employer in the Province to shut its doors in hard economic times. Where the
Province has not attempted in other cases to penalize companies by unilaterally seizing
their remaining assets and cancelling their remaining legal rights, it is clearly
discriminating against AbitibiBowater.

86.

Discrimination is also apparent in the Province's approach to compensation for the


expropriation. The Act limits AbitibiBowater's rights to be made whole while the
Province has publicly stated that it plans to insulate AbitibiBowater's lenders and
independent business partners from any adverse effects on their business interests.
Discrimination is further apparent, as previously discussed, in the Act's attempt to
preclude AbitibiBowater from accessing the courts or continuing with pending claims,
while all other investors in the Province still retain the full panoply of judicial options as
recourse for any ill treatment.

37

000363

IX.

RELIEF SOUGHT AND APPROXIMATE AMOUNT OF DA.MAGES CLAIMED

87.

The Investor, AbitibiBowater, claims damages for the following:


(a)

damages in an amount to be proven in these proceedings, currently


estimated as in excess ofCDN $300 million, equivalent to roughly US
$245 million at today's exchange rate, as compensation for the direct
losses caused by the measures of the Province that are inconsistent with
Canada's overarching obligations contained \vithin Part A ofNAFTA
Chapter Eleven;

(b)

additional consequential damages arising as a result of the illegal


measures, in an amount to be proven in these proceedings;

(c)

the full costs associated with these proceedings, including all professional
fees and disbursements, as well as the fees of the arbitral tribunal and any
administering institution;

(d)

pre-award and post-award interest at a rate to be fixed by the Tribunal;

(e)

payment of a sum of compensation equal to any tax consequences of the


award, in order to maintain the a\vard 's integrity; and

(f)

such further relief as the Arbitral Tribunal may deem just and appropriate.

38

000364

23 April1009
Respectfully submitktl,

~~ht~~l~h~~-o:~J~tY:__T;gk ---~--Jean E. Kalicki


Annie Khalid Hussain
ARNOLD & PORTER LLP

555 Twdtlh St., N.W.


Washington, D.C. 20004
United Staks of America

Phone:

202-942-5000

Fax:

202-942-5999

Pierre Bienvcnu
Martin J. Valasek
OGILVY RENAULT LLP
1981 \1cGill College A venue, Suite I I 00
Nfontreal, Quebec
Canada H3A 3C l
Phone:
514-847-4747
Fax:
514-286-5474
Paul D. Conlin
Alison G. Fitzgcrald
OGILVY RENACLT LLP
45 O'Connor Street, Suite 1500
Ottawa, Ontario
Phone:
613-780-8661
Fax:
613-230-5459

Colm St. Roch Scviour


Maureen E. Ryan
STEWART :V1CKELVEY
Suite J I 00 - Cahot Place
l 00 '\ c\\ Gmver S trcct
P.O. Box 503S
St. Johns -'ll A I C 5\'3
Canada
709-7~~-4270
Phone:
Fa.x:
709-722-4565

000365

Page 1 of2
5.19(1)
Vanstone, Melanie
From:
Sent:

April 23, 2009 9:46 AM

To:
king. william@ic. gc.ca; Benoit.Violette@ic. gc. ea; jyotsna. dalvi@ic. gc. ea;
paul.benoit@international.gc.ca; don.stephenson@internatlnal.gc.ca;
Robert.Ready@international.gc.ca; cynthia.bernier@international.gc.ca;
paul. terrien@international. gc.ca;
Tyler. Bjornson@N RCan-RNCan. gc.ca; Russell. Kuykendaii@N RCanRNCan.gc.ca;
macklem.tiff@fin.gc.ca; dunlop.robert@fin.gc.ca;
botham.Richard@fin.gc.ca; peter.mackay@acoa-apeca.gc.ca; Kevin.MacAdam@acoaapeca.gc.ca; shaun.masterson@acoa-apeca.gc.ca;
Dumont, Martin;
MacLeod, Alfred; Gilbert, Anne; Vanstone, Melanie; dmacdonald@pco-bcp.qc.ca;
deborah.gill@international.gc.ca; susan.harper@international.gc.ca;
lynn. mcdonald@international. gc. ea; kevin. thompson@international.gc.ca;
van nick. mondv@international.ge. ea;

5.19(1)

Cc:

Subject:

NAFTA NOTICE OF INTENT FILED BY ABITIBIBOWATER

Importance:

High

Attachments: AbiBowEXPRESS- 2009-04-23- AbitibiBowater Submits NAFTA Notice of lntent.pdf; 200904-23 Press Release- NAFTA Notice of Intent- EN.doc; 2009-04-23 Press Release- NAFTA
Notice of Intent- FR. doe; AbiBowEXPRESS - 2009-04-23 - AbitibiBowaterdepose une
Notification d_intention en vertu de I_ALENA.pdf; DOC001.pdf

Please find attached several documents related to today's filing by AbitibiBowater of our NAFTA Notice of Intent.
This of course follows the expropriation of Company assets in the province of Newfoudland & Labrador and our
unsuccessful efforts to-date to work out a fair and equitable settlement. During the upcoming 90-day period (part
of the officially designed cooling off period) in advance of filing an official case, we sincerely hope that we can
work out a collaborative resolution to this matter.

2010-10-28

000366

Page 2 of2
I've attached for your information, English and French versions of both our Press Release and internal newsletter.
The final document is a copy of the Notice of Intent itself. Please let me know if you have any questions. I can
be reached in the office at:
s.19(1)

2010-10-28

000367

abitibi A-..
bowater

abitibibowater.corn

April 23, 2009

EXPRESS
Please post until April 30, 2009

AbitibiBowater Submits NAFTA Notice of Intent


in Response to Illegal Expropriation of Rights
and Assets in Newfoundland and Labrador
Today we filed a Notice of Intent to Submit a Claim to Arbi~ration under the North American Free
Trade Agreement (NAFTA) with regards to the expropriation of our assets and rights in
Newfoundland and Labrador. We feel that the actions taken by the provincial government were
arbitrary, discriminatory and illegal, and we are seeking in excess of CDN$300 million in direct
compensation for the fair market value, plus additional costs and further relief.
"We have been operating in Newfoundland and Labrador for more than a century, contributing
significantly to the region's economic, social and sustainable development, .. said Dave Paterson.
"The actions of the government were unexpected and came despite our attempts to resolve all issues
related to our rights and assets in the province. We remain open to working with the federal and
provincial governments to find a fair resolution."
Since AbitibiBowater is incorporated in the state of Delaware and carries out business activities in the
United States, the expropriation of rights and assets represents a breach of Canada's obligations to a
U.S. investor under Chapter Eleven of NAFTA. The Company has filed this notice as part of the
dispute resolution mechanism available under NAFTA and will submit the claim to arbitration in three
months, pursuant to the relevant NAFTA provisions, should this matter not be resolved by that date.
The Company has asserted in the Notice of Intent that Bill 75 unquestionably breaches Canada's
NAFTA obligations on a number of grounds, including among others:

Basis of Expropriation: NAFTA explicitly details the grounds under which government
expropriation can occur. The criteria for expropriation are not met in Bill 75.

Fair Compensation: AbitibiBowater is entitled to immediate, full and fair compensation. Bill 75
does not ensure payment for the fair market value of the expropriated rights and assets.

Denial of Justice: Bill 75 purports to strip AbitibiBowater of any rights to access the courts,
which is independently a violation of NAFTA.

Discrimination: AbitibiBowater should be afforded the same rights and privileges as all other
domestic and foreign investors. Bill 75 is retaliatory in nature and discriminates against the
Company.

000368

abitibi

A~

bowater&.V
PRESS RELEASE
US$
ABWTQ (OTC)
ABH (TSX)

AbitibiBowater Submits NAFTA Notice of Intent


in Response to Illegal Expropriation of Rights and Assets
in Newfoundland and Labrador
MONTREAL, CANADA, April 23, 2009 - AbitibiBowater today filed a Notice of Intent
to Submit a Claim to Arbitratior. under the North American Free Trade Agreement
(''NAFTA'') with regards to the expropriation of its assets and rights in Newfoundland
and Labrador, Canada. It is the Company's position that the passing of Bill 75, which
expropriates the Company's provincial assets and contractual rights to natural
resources, by the provincial government was arbitrary, discriminatory and illegal.
AbitibiBowater is seeking in excess of CDN$300 million in direct compensation for the
fair market value of the expropriated rights and assets, plus additional costs and further
relief as the Arbitral Tribunal may deem just and appropriate.
In early December 2008, AbitibiBowater announced various capacity-reduction
measures, including the permanent closure of its Grand Falls mill, as a result of the
economic downturn and decline in product demand. In retaliation, the province hastily
passed Bill 75, without any attempt to consult with the Company and without holding
any public hearings.
The Company has asserted in the Notice of Intent that Bill 75 unquestionably breaches
Canada's NAFfA obligations on a number of grounds, including among others:

Basis of Expropriation: NAFTA explicitly details the grounds under which


government expropriation can occur. The criteria for expropriation are not met in
Bill 75.
Fair Compensation: AbitibiBowater is entitled to immediate, full and fair
compensation. Bill 75 does not ensure payment for the fair market value of the
expropriated rights and assets.
Denial of Justice: Bill 75 purports to strip AbitibiBowater of any rights to access
the courts, which is independently a violation of NAFfA.
Discrimination: AbitibiBowater should be afforded the same rights and
privileges as all other domestic and foreign investors. Bill 75 is retaliatory in
nature and discriminates against the Company.

"AbitibiBowater has been operating in Newfoundland and Labrador for more than a
century, contributing significantly to the region's economic, social and sustainable
Page 1 of 3

000369

development," stated David J. Paterson, President and Chief Executive Officer. "The
nationalization of our assets was unexpected and an unnecessary course of action. It
came despite our proactive outreach to form a joint working group to address and
resolve all issues related to our rights and assets in the province. The Company remains
open to seeking a collaborative resolution with the federal and provincial governments."
The expropriation relates to a broad range of AbitibiBowater's rights in Newfoundland
and Labrador, including land rights, timber rights, water use rights and various other
related rights and business partnerships, and these rights can be traced back in part to
grants by the provincial government and its predecessors, as well as to other thirdparty transactions. In additio:1 to the substantial sums it expended to acquire these
rights, the Company has invested hundreds of millions of dollars in the province over
the last century, ranging from capital investments in mill operations to road projects
that have helped build rural Newfoundland.
Since the Company is incorporated in the state of Delaware and carries out business
activities in the United States, the expropriation of rights and assets represents a
breach of Canada's obligations to a U.S. investor under Chapter Eleven of NAFTA. The
Company has filed this notice as part of the dispute resolution mechanism available
under NAFTA and will submit the claim to arbitration in three months, pursuant to the
relevant NAFTA provisions, should this matter not be resolved by that date.

"It is our obligation to defend the interests of our shareholders and ensure we receive
compensation for the fair market value of the expropriated assets, plus additional
damages. With this notice, we have taken the first step in pursuing legal actions,"
added David Paterson.
Media should take note that copies of the Notice of Intent under Chapter Eleven of
NAFTA are available upon request. The following paragraphs may be of interest:
NAFTA Provisions Breached:
Underlying Facts:
About AbitibiBowater:
AbitibiBowater's History and Rights in the Province:
Additional Investments:
The Hydro Assets:
The Grand Falls Mill Closure Plan:
The Province's Ultimatum:
The Province's "Justifications":
Expropriation:
Denial of Justice:
Lack of Compensation:
NAFTA Violations:
Relief Sought:

Paragraphs 6-7
Paragraphs 8-11
Paragraphs 12-17
Paragraphs 18-29
Paragraphs 30-33
Paragraphs 34-41
Paragraphs 42-51
Paragraphs 52-54
Paragraphs 55-58
Paragraphs 59-67
Paragraphs 68-69
Paragraphs 70-71
Paragraphs 72-86
Paragraph 87

Page 2 of 3

000370

AbitibiBowater produces a wide range of newsprint, commercial printing papers, market


pulp and wood products. It is the eighth largest publicly traded pulp and paper
manufacturer in the world. AbitibiBowater owns or operates 23 pulp and paper facilities
and 30 wood products facilities located in the United States, Canada, the United

Kingdom and South Korea. Marketing its products in more than 90 countries, the
Company is also among the world's largest recyclers of old newspapers and magazines,
and has third-party certified 100% of its managed woodlands to sustainable forest
management standards. AbitibiBowater's shares trade over-the-counter on the Pink
Sheets under the stock symbol ABWTQ.
-30-

Contacts
Investors
Duane Owens
Vice President, Finance
864 282-9488

Media and Others


Seth Kursman
Vice President, Communications and Government Affairs
514 394-2398
seth.kursman@abitibibowater.com

Page 3 of 3

000371

abitibi A-..

bowateri.V
COMMUNIQUE DE PRESSE

$us

ABWTQ (hors cote)


ABH (TSX)

AbitibiBowater depose une Notification d'intention en vertu de


I'ALENA en reponse a l'expropriation illegale de droits et d'actifs
Terre-Neuve-et-Labrador

MONTREAL, CANADA, le 23 avril 2009 - AbitibiBowater a depose aujourd'hui une


Notification d'intention de soumettre une plainte a l'arbitrage en vertu de !'Accord de
libre-echange nord-americain ( ALENA ) concernant !'expropriation de ses actifs et de
ses droits aTerre-Neuve-et-Labrador, au Canada. La Societe estime que !'adoption par
le gouvernement provincial du projet de loi 75, qui exproprie les actifs dans la province
et les droits contractuels de la Societe
l'egard des ressources naturelles, etait
arbitraire, discriminatoire et illegale. AbitibiBowater demande une indemnisation directe
de plus de 300 M$ CA pour la juste valeur marchande des droits et des actifs
expropries, plus les frais additionnels et autres mesures de redressement que le
Tribunal arbitral pourrait juger justes et adequats.

Au debut de decembre 2008, AbitibiBowater a annonce diverses mesures de reduction


de sa capacite de production, dont la fermeture permanente de son usine de Grand
Falls, en raison du ralentissement economique et de la baisse de la demande de
produits. En guise de represailles, la province a adopte a la hate le projet de loi 75,
sans pour autant consulter la Societe et sans tenir d'audiences publiques.
Dans la Notification d'intention, la Societe a fait valoir que le projet de loi 75 viole
indiscutablement les obligations du Canada prevues en vertu de I'ALENA pour plusieurs
motifs, dont les suivants :

Motifs de l'expropriation : L'ALENA detaille de fa<;on explicite les motifs en


vertu desquels une expropriation gouvernementale peut avoir lieu. Les crib3res
relatifs I'expropriation ne sont pas satisfaits dans le projet de loi 75.
Indemnisation juste : AbitibiBowater a droit une indemnisation immediate,
entiere et juste. Le projet de loi 75 ne garantit pas le paiement de la juste valeur
marchande des droits et des actifs expropries.
Deni de justice : Le projet de loi 75 vise priver AbitibiBowater de tous droits
d'acces aux tribunaux, ce qui constitue independamment une violation de
I'ALENA.
Discrimination : AbitibiBowater devrait avoir les memes droits et privileges que
tous les autres investisseurs nationaux et etrangers. Le projet de loi 75 constitue
une mesure de represailles et de discrimination envers la Societe.

Page 1 de 3

000372

AbitibiBowater exerce des activites

Terre-Neuve-et-Labrador depuis plus d'un siecle


et a grandement contribue l'essor economique et social et au developpement durable
de la region , a indique David J. Paterson, president et chef de la direction. La
nationalisation de nos actifs est un acte inopine et constitue un plan d'action inutile. Ce
processus s'est enclenche malgre l'approche proactive que nous avons adoptee afin de
former un groupe de travail conjoint charge d'examiner et de regler toutes les questions
liees
nos droits et
nos actifs dans la province. La Societe reste ouverte
une
collaboration avec les gouvernements federal et provincial pour trouver une solution.

L'expropriation
vise
un
vaste
eventail
de
droits
d'AbitibiBowater
Terre-Neuve-et-Labrador, notamment des droits fanciers, des droits de coupe, des
droits d'utilisation de l'eau et divers autres droits et partenariats commerciaux
des octrois par le gouvernement
connexes, et ces droits remontent en partie
provincial et ses predecesseurs ainsi que d'autres operations avec des tiers. En plus des
sommes considerables qu'elle a depensees pour acquerir ces droits, la Societe a investi
des centaines de millions de dollars dans la province au cours du dernier siecle, qu'il
s'agisse de depenses en immobilisations liees !'exploitation d'usines ou de projets de
routes qui ont contribue l'essor des regions rurales de Terre-Neuve.

Etant donne que la Societe est constituee en vertu des lois de I'Etat du Delaware et
qu'elle exerce des activites commerciales aux Etats-Unis, !'expropriation des droits et
des actifs represente une violation des obligations du Canada envers un investisseur
americain selon le Chapitre Onze de I'ALENA. La Societe a depose cette notification
dans le cadre d'un mecanisme de resolution des differends prevu en vertu de I'ALENA et
l'arbitrage dans trois mois, conformement aux dispositions
soumettra la plainte
pertinentes de I'ALENA, si cette question n'est pas reglee d'ici cette date.

11 est de notre devoir de defendre les inten~ts de nos actionnaires et de nous assurer
que nous recevons une indemnisation correspondant la juste valeur marchande des
actifs expropries, plus des dommages-interets additionnels. Cette notification constitue
la premiere etape de nos actions en justice , a ajoute David Paterson.

Les medias doivent noter que des exemplaires de la Notification d'intention en vertu du
Chapitre Onze de I'ALENA sont disponibles sur demande (en anglais seulement). Les
paragraphes suivants pourraient etre d'interet :
Dispositions de I'ALENA faisant
l'objet d'une violation :
Faits sous-jacents :
Au sujet d'AbitibiBowater:
Histoire et droits d'AbitibiBowater dans la province :
Investissements additionnels :
Les actifs hydroelectriques :
Projet de fermeture de l'usine de Grand Falls :
L'ultimatum de la province :
Les justifications de la province :

Paragraphes 6-7
Paragraphes 8-11
Paragraphes 12-17
Paragraphes 18-29
Paragraphes 30-33
Paragraphes 34-41
Paragraphes 42-51
Paragraphes 52-54
Paragraphes 55-58

Page 2 de 3

000373

Paragraphes 59-67
Paragraphes 68-69
Paragraphes 70-71
Paragraphes 72-86
Paragraphe 87

Expropriation :
Deni de justice :
Absence d'indemnisation :
Violations de I'ALENA:
Mesures de redressement demandees :

AbitibiBowater produit une gamme etendue de papier journal, de papiers d'impression


commerciale, de pate commerciale et de produits du bois. Elle se classe au huitieme
rang mondial des fabricants de pates et papiers inscrits en bourse. AbitibiBowater
possede ou exploite 23 usines de pates et papiers et 30 usines de produits du bois aux
Etats-Unis, au Canada, au Royaume-Uni et en Coree du Sud. Commercialisant ses
produits dans plus de 90 pays, la Societe est l'un des plus importants recycleurs de
vieux journaux et magazines au monde. De plus, la totalite des terrains forestiers sous
sa gestion sont certifies conformes une norme d'amenagement forestier durable par
des experts independants. Les actions d'AbitibiBowater se negocient sous le symbole
ABWTQ sur le marche hors cote Pink Sheets.

-30Personnes-ressources
Investisseurs
Duane Owens
Vice-president, Finances
864 282-9488

Medias et autres
Jean-Philippe Cote
Directeur principal, Affaires publiques et
relations gouvernementales- Canada
514 394-2386
jean-philippe.cote@abitibibowater.corn

Page 3 de 3

000374

abitibi A-.
bowaterllaV

abiti bibowater .eo m

EXPRESS

Afficher jusqu'au 30 avril 2009

Le 23 avril 2009

AbitibiBowater depose une Notification d'intention en vertu


de I'ALENA en reponse l'expropriation illegale de droits et
d'actifs Terre-Neuve-et-Labrador

Nous avons depose aujourd'hui une Notification d'intention de soumettre une plainte l'arbitrage en vertu
de I'Accord de libre-echange nord-americain (ALENA) concernant !'expropriation de nos actifs et de nos
droits Terre-Neuve-et-Labrador. Nous estimons que l'action prise par le gouvernement provincial etait
arbitraire, discriminatoire et illegale, et nous demandons une indemnisation directe de plus de 300 M$ CA
pour la juste valeur marchande, plus les frais additionnels et autres mesures de redressement.

Nous exen;ons des activites Terre-Neuve-et-Labrador depuis plus d'un siecle et avons grandement
contribue l'essor economique et social et au developpement durable de la region, a indique
Dave Paterson. Les mesures inopinees de la part du gouvernement ont ete prises malgre nos efforts pour
examiner et regler toutes les questions liees nos droits et nos actifs dans la province. La Societe reste
ouverte une collaboration avec les gouvernements federal et provincial pour trouver une solution
equitable.

Etant donne qu'AbitibiBowater est constituee en vertu des lois de I'Etat du Delaware et qu'elle exerce des
activites commerciales aux Etats-Unis, !'expropriation des droits et des actifs represente une violation des
obligations du Canada envers un investisseur americain selon le Chapitre Onze de I'ALENA. La Societe a
depose cette notification dans le cadre d'un mecanisme de resolution des differends prevu en vertu de
I'ALENA et soumettra la plainte l'arbitrage dans trois mois, conformement aux dispositions pertinentes
de I'ALENA, si cette question n'est pas: reglee d'ici cette date.

Dans la Notification d'intention, la Societe a fait valoir que le projet de loi 75 viole indiscutablement les
obligations du Canada prevues en vertu de I'ALENA pour plusieurs motifs, dont les suivants :
..

Motifs de I'expropriation : L'ALENA detaille de fa~on explicite les motifs en vertu desquels une
expropriation gouvernementale peut avoir lieu. Les criteres relatifs a !'expropriation ne sont pas
satisfaits dans le projet de loi 75.

..

Indemnisation juste : AbitibiBowater a droit une indemnisation immediate, entiere et juste. Le


projet de loi 75 ne garantit pas le paiement de la juste valeur marchande des droits et des actifs
expropries.

11

Deni de justice: Le projet de loi 75 vise priver AbitibiBowater de tous droits d'acces aux tribunaux,
ce qui constitue independamment une violation de I'ALENA.

11

Discrimination : AbitibiBowater devrait avoir les memes droits et privileges que tousles autres
investisseurs nationaux et etrangers. Le projet de loi 75 constitue une mesure de represailles et de
discrimination envers la Societe.

000375

Pages 376 to I

a 380

are withheld pursuant to sections


sont retenues en vertu des articles

14, 15(1 ), 21 (1 )(b)

of the Access to Information Act


de la Acces

a l'information

Message

Page 1 of2

Neilson, David
From:

Vanstone, Melanie

Sent:

April 23, 2009 10:08 AM

To:

Mondou, lsabelle; Kaur Bhinder, Kiran; Shuttle, Paul

Subject:

FW: NAFTA NOTICE OF INTENT FILED BY ABITIBIBOWATER

Importance:

High

Attachments: AbiBowEXPRESS- 2009-04-23- AbitibiBowater Submits NAFTA Notice of lntent.pdf; 200904-23 Press Release- NAFTA Notice of Intent- EN.doc; 2009-04-23 Press Release- NAFTA
Notice of Intent- FR.doc; AbiBowEXPRESS - 2009-04-23 - AbitibiBowaterdepose une
Notification d_intention en vertu de I_ALENA.pdf; DOC001.pdf

Melanie Vanstone
mvanstone@p<;Q:PGP.Qc.ca
613-957-5447
-----Original Message----From:
Sent: Thursday, April 23, 2009 9:46 AM
To:
Minister.Industry@ic.gc.ca;
king.william@ic.gc.ca; Benoit.Violette@ic.gc.ca; jyotsna.dalvi@ic.gc.ca;
paul.benoit@international.gc.ca; don.stephenson@internatinal.gc.ca;
Robert.Ready@international.gc.ca; cynthia.bernier@international.gc.ca;
paul.terrien@international.gc.ca;
Tyler.Bjornson@NRcan-RNCan.gc.ca;
Russeii.Kuykendaii@NRCan-RNCan.gc.ca;
macklem.tiff@fin.gc.ca; dunlop.robert@fin.gc.ca;
botham.Richard@fin.gc.ca;
Kevin.MacAdam@acoa-apeca.gc.ca;
shaun.masterson@acoa-apeca.gc.ca;
Dumont, Martin; Macleod, Alfred; Gilbert, Anne;
Vanstone, Melanie; dmacdonald@pco-bcp.qc.ca; deborah.gill@international.gc.ca;
susan.harper@international.gc.ca; lynn.mcdonald@international.gc.ca; kevin.thompson@international.gc.ca;
yann ick. mondy@international.gc.ca;

s.15(1)
s.19(1)

Subject: NAFTA NOTICE OF INTENT FILED BY ABffiBIBOWATER

2010-11-29

000381

Page 382
is withheld pursuant to sections
est retenue en vertu des articles

19(1 ), 20(1 )(b)

of the Access to Information Act


de la Acces

a l'information

.eo m

April 23, 2009

Please post until April 30, 2009

AbitibiBowater Submits NAFTA Notice of Intent


in Response to Illegal Expropriation of Rights
and Assets in Newfoundland and Labrador
Today we filed a Notice of Intent to Submit a Claim to Arbitration under the North American Free
Trade Agreement (NAFTA) with regards to the expropriation of our assets and rights in
Newfoundland and Labrador. We feel that the actions taken by the provincial government were
arbitrary, discriminatory and illegal, and we are seeking in excess of CDN$300 million in direct
compensation for the fair market value, plus additional costs and further relief.
"We have been operating in Newfoundland and Labrador for more than a century, contributing
significantly to the region's economic, social and sustainable development," said Dave Paterson.
"The actions of the government were unexpected and came despite our attempts to resolve all issues
related to our rights and assets in the province. We remain open to working with the federal and
provincial governments to find a fair resolution."
Since AbitibiBowater is incorporated in the state of Delaware and carries out business activities in the
United States, the expropriation of rights and assets represents a breach of Canada's obligations to a
U.S. investor under Chapter Eleven of NAFTA. The Company has filed this notice as part of the
dispute resolution mechanism available under NAFTA and will submit the claim to arbitration in three
months, pursuant to the relevant NAFTA provisions, should this matter not be resolved by that date.
The Company has asserted in the Notice of Intent that Bill 75 unquestionably breaches Canada's
NAFTA obligations on a number of grounds, including among others:

"'

Basis of Expropriation: NAFTA explicitly details the grounds under which government
expropriation can occur. The criteria for expropriation are not met in Bill 75.
Fair Compensation: AbitibiBowater is entitled to immediate, full and fair compensation. Bill 75
does not ensure payment for the fair market value of the expropriated rights and assets.
Denial of Justice: Bill 75 purports to strip AbitibiBowater of any rights to access the courts,
which is independently a violation of NAFTA.

"'

Discrimination: AbitibiBowater should be afforded the same rights and privileges as all other
domestic and foreign investors. Bill 75 is retaliatory in nature and discriminates against the
Company.

000383

PRESS RELEASE
US$
ABWTQ (OTC)
ABH (TSX)

AbitibiBowater Submits NAFTA Notice of Intent


in Response to Illegal Expropriation of Rights and Assets
in Newfoundland and Labrador
MONTREAL, CANADA, April 23, 2009 - AbitibiBowater today filed a Notice of Intent
to Submit a Claim to Arbitration under the North American Free Trade Agreement
("NAFTA") with regards to the expropriation of its assets and rights in Newfoundland
and Labrador, Canada. It is the Company's position that the passing of Bill 75, which
expropriates the Company's provincial assets and contractual rights to natural
resources, by the provincial government was arbitrary, discriminatory and illegal.
AbitibiBowater is seeking in excess of CDN$300 million in direct compensation for the
fair market value of the expropriated rights and assets, plus additional costs and further
relief as the Arbitral Tribunal may deem just and appropriate.
In early December 2008, AbitibiBowater announced various capacity-reduction
measures, including the permanent closure of its Grand Falls mill, as a result of the
economic downturn and decline in product demand. In retaliation, the province hastily
passed Bill 75, without any attempt to consult with the Company and without holding
any public hearings.
The Company has asserted in the Notice of Intent that Bill 75 unquestionably breaches
Canada's NAFTA obligations on a number of grounds, including among others:

Basis of Expropriation: NAFTA explicitly details the grounds under which


government expropriation can occur. The criteria for expropriation are not met in
Bill 75.
Fair Compensation: AbitibiBowater is entitled to immediate, full and fair
compensation. Bill 75 does not ensure payment for the fair market value of the
expropriated rights and assets.
Denial of Justice: Bill 75 purports to strip AbitibiBowater of any rights to access
the courts, which is independently a violation of NAFTA.
Discrimination: AbitibiBowater should be afforded the same rights and
privileges as all other domestic and foreign investors. Bill 75 is retaliatory in
nature and discriminates against the Company.

"AbitibiBowater has been operating in Newfoundland and Labrador for more than a
century, contributing significantly to the region's economic, social and sustainable
Page 1 of 3

000384

development," stated David J. Paterson, President and Chief Executive Officer. "The
nationalization of our assets was unexpected and an unnecessary course of action. It
came despite our proactive outreach to form a joint working group to address and
resolve all issues related to our rights and assets in the province. The Company remains
open to seeking a collaborative resolution with the federal and provincial governments."
The expropriation relates to a broad range of AbitibiBowater's rights in Newfoundland
and Labrador, including land rights, timber rights, water use rights and various other
related rights and business partnerships, and these rights can be traced back in part to
grants by the provincial government and its predecessors, as well as to other thirdparty transactions. In addition to the substantial sums it expended to acquire these
rights, the Company has invested hundreds of millions of dollars in the province over
the last century, ranging from capital investments in mill operations to road projects
that have helped build rural Newfoundland.
Since the Company is incorporated in the state of Delaware and carries out business
activities in the United States, the expropriation of rights and assets represents a
breach of Canada's obligations to a U.S. investor under Chapter Eleven of NAFTA. The
Company has filed this notice as part of the dispute resolution mechanism available
under NAFTA and will submit the claim to arbitration in three months, pursuant to the
relevant NAFTA provisions, should this matter not be resolved by that date.
"It is our obligation to defend the interests of our shareholders and ensure we receive
compensation for the fair market value of the expropriated assets, plus additional
damages. With this notice, we have taken the first step in pursuing legal actions,"
added David Paterson.
Media should take note that copies of the Notice of Intent under Chapter Eleven of
NAFTA are available upon request. The following paragraphs may be of interest:
NAFTA Provisions Breached:
Underlying Facts:
About AbitibiBowater:
AbitibiBowater's History and Rights in the Province:
Additional Investments:
The Hydro Assets:
The Grand Falls Mill Closure Plan:
The Province's Ultimatum:
The Province's "Justifications":
Expropriation:
Denial of Justice:
Lack of Compensation:
NAFTA Violations:
Relief Sought:

Paragraphs 6-7
Paragraphs 8-11
Paragraphs 12-17
Paragraphs 18-29
Paragraphs 30-33
Paragraphs 34-41
Paragraphs 42-51
Paragraphs 52-54
Paragraphs 55-58
Paragraphs 59-67
Paragraphs 68-69
Paragraphs 70-71
Paragraphs 72-86
Paragraph 87

Page 2 of 3

000385

AbitibiBowater produces a wide range of newsprint, commercial printing papers, market


pulp and wood products. It is the eighth largest publicly traded pulp and paper
manufacturer in the world. AbitibiBowater owns or operates 23 pulp and paper facilities
and 30 wood products facilities located in the United States, Canada, the United
Kingdom and South Korea. Marketing its products in more than 90 countries, the
Company is also among the world's largest recyclers of old newspapers and magazines,
and has third-party certified 100% of its managed woodlands to sustainable forest
management standards. AbitibiBowater's shares trade over-the-counter on the Pink
Sheets under the stock symbol ABWTQ.
-30-

Contacts
Investors
Duane Owens
Vice President, Finance
864 282-9488

Media and Others


Seth Kursman
Vice President, Communications and Government Affairs
514 394-2398
seth.kursman@abitibibowater.com

Page 3 of 3

000386

COMMUNIQUE DE PRESSE

$us
ABWTQ (hors cote)
ABH (TSX)

AbitibiBowater depose une Notification d'intention en vertu de


I'ALENA en reponse l'expropriation illegale de droits et d'actifs
a Terre-Neuve-et-Labrador

MONTREAL, CANADA, le 23 avril 2009 - AbitibiBowater a depose aujourd'hui une


Notification d'intention de soumettre une plainte a l'arbitrage en vertu de I'Accord de
libre-echange nord-americain ( ALENA ) concernant !'expropriation de ses actifs et de
ses droits a Terre-Neuve-et-Labrador, au Canada. La Societe estime que !'adoption par
le gouvernement provincial du projet de loi 75, qui exproprie les actifs dans la province
l'egard des ressources naturelles, etait
et les droits contractuels de la Societe
arbitraire, discriminatoire et illegale. AbitibiBowater demande une indemnisation directe
de plus de 300 M$ CA pour la juste valeur marchande des droits et des actifs
expropries, plus les frais additionnels et autres mesures de redressement que le
Tribunal arbitral pourrait juger justes et adequats.

Au debut de decembre 2008, AbitibiBowater a annonce diverses mesures de reduction


de sa capacite de production, dont la fermeture permanente de son usine de Grand
Falls, en raison du ralentissement economique et de la baisse de la demande de
produits. En guise de represailles, la province a adopte a la hate le projet de loi 75,
sans pour autant consulter la Societe et sans tenir d'audiences publiques.
Dans la Notification d'intention, la Societe a fait valoir que le projet de loi 75 viole
indiscutablement les obligations du Canada prevues en vertu de I'ALENA pour plusieurs
motifs, dont les suivants :

Motifs de l'expropriation : L'ALENA detaille de fa<;on explicite les motifs en


vertu desquels une expropriation gouvernementale peut avoir lieu. Les criteres
relatifs a !'expropriation ne sont pas satisfaits dans le projet de loi 75.
Indemnisation juste: AbitibiBowater a droit une indemnisation immediate,
entiere et juste. Le projet de loi 75 ne garantit pas le paiement de la juste valeur
marchande des droits et des actifs expropries.
Deni de justice : Le projet de loi 75 vise a priver AbitibiBowater de tous droits
d'acces aux tribunaux, ce qui constitue independamment une violation de
I'ALENA.
Discrimination : AbitibiBowater devrait avoir les memes droits et privileges que
tous les autres investisseurs nationaux et etrangers. Le projet de loi 75 constitue
une mesure de represailles et de discrimination envers la Societe.

Page 1 de 3

000387

AbitibiBowater exerce des activib~s Terre-Neuve-et-Labrador depuis plus d'un siecle


et a grandement contribue l'essor economique et social et au developpement durable
de la region , a indique David J. Paterson, president et chef de la direction. La
nationalisation de nos actifs est un acte inopine et constitue un plan d'action inutile. Ce
processus s'est enclenche malgre l'approche proactive que nous avons adoptee afin de
former un groupe de travail conjoint charge d'examiner et de regler toutes les questions
liees
nos droits et
nos actifs dans la province. La Societe reste ouverte
une
collaboration avec les gouvernements federal et provincial pour trouver une solution.

L'expropriation
vise
un
vaste
eventail
de
droits
d'AbitibiBowater
a
Terre-Neuve-et-Labrador, notamment des droits fanciers, des droits de coupe, des
droits d'utilisation de l'eau et divers autres droits et partenariats commerciaux
des octrois par le gouvernement
connexes, et ces droits remontent en partie
provincial et ses predecesseurs ainsi que d'autres operations avec des tiers. En plus des
sommes considerables qu'elle a depensees pour acquerir ces droits, la Societe a investi
des centaines de millions de dollars dans la province au cours du dernier siecle, qu'il
s'agisse de depenses en immobilisations liees a !'exploitation d'usines ou de projets de
routes qui ont contribue l'essor des regions rurales de Terre-Neuve.

Etant donne que la Societe est constituee en vertu des lois de I'Etat du Delaware et
qu'elle exerce des activites commerciales aux Etats-Unis, !'expropriation des droits et
des actifs represente une violation des obligations du Canada envers un investisseur
americain selon le Chapitre Onze de I'ALENA. La Societe a depose cette notification
dans le cadre d'un mecanisme de resolution des differends prevu en vertu de I'ALENA et
soumettra la plainte
l'arbitrage dans trois mois, conformement aux dispositions
pertinentes de I'ALENA, si cette question n'est pas reglee d'ici cette date.

Il est de notre devoir de defendre les intents de nos actionnaires et de nous assurer
que nous recevons une indemnisation correspondant la juste valeur marchande des
actifs expropries, plus des dommages-interets additionnels. Cette notification constitue
la premiere etape de nos actions en justice, a ajoute David Paterson.

Les medias doivent noter que des exemplaires de la Notification d'intention en vertu du
Chapitre Onze de I'ALENA sont disponibles sur demande (en anglais seulement). Les
paragraphes suivants pourraient etre d'interet :
Dispositions de I'ALENA faisant
l'objet d'une violation :
Faits sous-jacents :
Au sujet d'AbitibiBowater :
Histoire et droits d'AbitibiBowater dans la province :
Investissements additionnels :
Les actifs hydroelectriques :
Projet de fermeture de l'usine de Grand Falls :
L'ultimatum de la province :
Les justifications de la province :

Paragraphes 6-7
Paragraphes 8-11
Paragraphes 12-17
Paragraphes 18-29
Paragraphes 30-33
Paragraphes 34-41
Paragraphes 42-51
Paragraphes 52-54
Paragraphes 55-58

Page 2 de 3

000388

Expropriation :
Deni de justice :
Absence d'indemnisation :
Violations de I'ALENA :
Mesures de redressement demandees :

Paragraphes 59-67
Paragraphes 68-69
Paragraphes 70-71
Paragraphes 72-86
Paragraphe 87

AbitibiBowater produit une gamme etendue de papier journal, de papiers d'impression


commerciale, de pate commerciale et de produits du bois. Elle se classe au huitieme
rang mondial des fabricants de pates et papiers inscrits en bourse. AbitibiBowater
possede ou exploite 23 usines de pates et papiers et 30 usines de produits du bois aux
Etats-Unis, au Canada, au Royaume-Uni et en Coree du Sud. Commercialisant ses
produits dans plus de 90 pays, la Societe est l'un des plus importants recycleurs de
vieux journaux et magazines au monde. De plus, la totalite des terrains forestiers sous
sa gestion sont certifies conformes une norme d'amenagement forestier durable par
des experts independants. Les actions d'AbitibiBowater se negocient sous le symbole
ABWTQ sur le marche hors cote Pink Sheets.

-30-

Personnes-ressources
Investisseurs
Duane Owens
Vice-president, Finances
864 282-9488

Medias et autres
Jean-Philippe Cote
Directeur principal, Affaires publiques et
relations gouvernementales - Canada
514 394-2386
jean-philippe.cote@abitibibowater.com

Page 3 de 3

000389

I
Le 23 avril 2009

Afficher jusqu'au 30 avril 2009

AbitibiBowater depose une Notification d'intention en vertu


de I'ALENA en reponse l'expropriation illegale de droits et
d'actifs Terre-Neuve-et-Labrador

Nous avons depose aujourd'hui une Notification d'intention de soumettre une plainte l'arbitrage en vertu
de I'Accord de libre-echange nord-americain (ALENA) concernant !'expropriation de nos actifs et de nos
droits Terre-Neuve-et-Labrador. Nous estimons que l'action prise par le gouvernement provincial etait
arbitraire, discriminatoire et illegale, et nous demandons une indemnisation directe de plus de 300 M$ CA
pour la juste valeur marchande, plus les frais additionnels et autres mesures de redressement.

Nous exen;;:ons des activites a Terre-Neuve-et-Labrador depuis plus d'un siecle et avons grandement

contribue l'essor economique et social et au developpement durable de la region, a indique


Dave Paterson. Les mesures inopinees de la part du gouvernement ont ete prises malgre nos efforts pour
examiner et regler toutes les questions liees nos droits et nos actifs dans la province. La Societe reste
ouverte une collaboration avec les gouvernements federal et provincial pour trouver une solution
equitable.

Etant donne qu'AbitibiBowater est constituee en vertu des lois de I'Etat du Delaware et qu'elle exerce des
activites commerciales aux Etats-Unis, !'expropriation des droits et des actifs represente une violation des
obligations du Canada envers un investisseur americain selon le Chapitre Onze de I'ALENA. La Societe a
depose cette notification dans le cadre d'un mecanisme de resolution des differends prevu en vertu de
I'ALENA et soumettra la plainte l'arbitrage dans trois mois, conformement aux dispositions pertinentes
de I'ALENA, si cette question n'est pas reglee d'ici cette date.

Dans la Notification d'intention, la Societe a fait valoir que le projet de loi 75 viole indiscutablement les
obligations du Canada prevues en vertu de I'ALENA pour plusieurs motifs, dont les suivants :
~

Motifs de !'expropriation : L'ALENA detail le de fa~on explicite les motifs en vertu desquels une
expropriation gouvernementale peut avoir lieu. Les criteres relatifs
satisfaits dans le projet de loi 75.

a !'expropriation ne sont pas

une indemnisation immediate, entiere et juste. Le


projet de loi 75 ne garantit pas le paiement de la juste valeur marchande des droits et des actifs
expropries.

Deni de justice : Le projet de loi 75 vise

Indemnisation juste : AbitibiBowater a droit

apriver AbitibiBowater de tous droits d'acces aux tribunaux,

ce qui constitue independamment une violation de I'ALENA.


~

Discrimination : AbitibiBowater devrait avoir les memes droits et privileges que tous les autres
investisseurs nationaux et etrangers. Le projet de loi 75 constitue une mesure de represailles et de
discrimination envers la Societe.

000390

NOTICE OF INTENT TO SUBMIT A CLAIM TO ARBITRATION UNDER


CHAPTER ELEVEN OF THE NORTH AMERICAN FREE TRADE AGREEMENT

ABITIBIBOWATER INC.,
Investor,

v.
GOVERNMENT OF CANADA,
Party.

Pursuant to Articles I 116, 1117, and 1119 of the North American Free Trade Agreement
("NAFTA"), the disputing Investor, AbitibiBowater Inc. {hereinafter "AbitibiBowater" or "the
Company"), hereby respectfully serves a Notice oflntent to Submit a Claim to Arbitration for

breach by the Government of Canada (hereinafter "Canada"), through the actions of the
provincial Government ofNewfoundland and Labrador, of its obligations under Chapter Eleven
ofNAFT A. AbitibiBowater also hereby requests Canada and the Government of Newfoundland
and Labrador to begin fonnal consultations and negotiations, as contemplated by NAFTA Article
l I 18, in an effort to amicably resolve this dispute. Such consultations would be in accordance
with the Company's proactive outreach to fonn a joint working group to address and resolve all
issues related to its assets and rights in the Province of Newfoundland and Labrador.

000391

Pages 392 to I

a 429

are withheld pursuant to section


sont retenues en vertu de l'article

68(a)

of the Access to Information Act


de la Acces

a l'information

Page 1 of 1

Vanstone, Melanie
From:

Vanstone, Melanie

Sent:

April 24, 2009 11 :03 AM

To:

Sambol, Joseph; Whittaker, Robyn

Cc:

Kostic, Maja; Gilbert, Anne

Subject:

RE: Policy Check: Abitibi

Attachments: AbitibiBowater NAFTA Chapter 11 - ML -23-04-09- ENG.DOC


A few changes to the media lines and background attached

5.14
5.21 (1 )(b)
From: Sambol, Joseph

Sent: Friday, April 24, 2009 10:37 AM


To: Vanstone, Melanie; Whittaker, Robyn
Cc: Kostic, Maja
Subject: Policy Check: Abitibi

i. Could
you please provide comments by_ early this afternoon? Thank you.

2010-11-22

000430

Pages 431 to I

a 432

are withheld pursuant to sections


sont retenues en vertu des articles

14, 15(1 ), 21 (1 )(b)

of the Access to Information Act


de la Acces

a l'information

April 23, 2009

Please post until April 30, 2009

AbitibiBowater Submits NAFTA Notice of Intent


in Response to Illegal Expropriation of Rights
and Assets in Newfoundland and Labrador
Today we filed a Notice of Intent to Submit a Claim to Arbitration under the North American Free
Trade Agreement (NAFTA) with regards to the expropriation of our assets and rights in
Newfoundland and Labrador. We feel that the actions taken by the provincial government were
arbitrary, discriminatory and illegal, and we are seeking in excess of CDN$300 million in direct
compensation for the fair market value, plus additional costs and further relief.
"We have been operating in Newfoundland and Labrador for more than a century, contributing
significantly to the region's economic, social and sustainable development," said Dave Paterson.
"The actions of the government were unexpected and came despite our attempts to resolve all issues
related to our rights and assets in the province. We remain open to working with the federal and
provincial governments to find a fair resolution."
Since AbitibiBowater is incorporated in the state of Delaware and carries out business activities in the
United States, the expropriation of rights and assets represents a breach of Canada's obligations to a
U.S. investor under Chapter Eleven of NAFTA. The Company has filed this notice as part of the
dispute resolution mechanism available under NAFTA and will submit the claim to arbitration in three
months, pursuant to the relevant NAFTA provisions, should this matter not be resolved by that date.
The Company has asserted in the Notice of Intent that Bill 75 unquestionably breaches Canada's
NAFTA obligations on a number of grounds, including among others:
*

Basis of Expropriation: NAFTA explicitly details the grounds under which government
expropriation can occur. The criteria for expropriation are not met in Bill 75.
fair Compensation: AbitibiBowater is entitled to immediate, full and fair compensation. Bill 75
does not ensure payment for the fair market value of the expropriated rights and assets.
Denial of Justice: Bill 75 purports to strip AbitibiBowater of any rights to access the courts,
which is independently a violation of NAFTA.
Discrimination: AbitibiBowater should be afforded the same rights and privileges as all other
domestic and foreign investors. Bill 75 is retaliatory in nature and discriminates against the
Company.

000433

Page 1 of l

Vanstone, Melanie
From:

Boyland, Mark [Mark.Boyland@NRCan-RNCan.gc.ca]

Sent:

May 14, 2009 2:20PM

To:

Vanstone, Melanie

Subject: AB

s.19(1)

On AB, Minister was button holed


about the Grand Falls mill. While
I wasn't part of the discussion, we spoke after and she wants to be the federal
champion to find a resolution.
As you know AB recently
signalled an intent to challenge under NAFTA (although they would have much
preferred to see this settled) . AB still has interest in settling and of the view
(legitimately) that Canada has an incentive to settle as well since a NAFTA process
clearly implicates GOC both in terms of obligation to defend and liability to pay
(legal fees and any judgement).
OM which might be more palatable to AB and receivers.
She wants dept to collect the facts of the issue and position of players-.
particularly Govt of NL. Will follow up with MINO for more specific expectations on
this, but undoubtedly a DM call to NL is likely part of this.
CFS I NRCan

Mark Boyland

5.14

mboyland@nrcan.gc.ca
613-995-9025

5.21 (1 )(b)

2010-10-28

000434

Message

Page 1 of3

Vanstone, Melanie
From:

Matthew.Kronby@international.gc.ca

Sent:

May 14, 2009 2:26PM

To:

Cynthia.Bernier@international.gc.ca; Vanstone, Melanie

Cc:

sylvie.tabet@international.gc.ca

s.23

Subject: RE: Bankruptcy

For advice on CCAA- it's actually IndustrY Canada legal counsel (Mark Taggart), not the Trade Law Bureau that
can assist.

We of course do not have any precise information as to how AB has valued its claim, nor did AB's representative
at the meeting offer to provide any further information when I put the question to him.
-Matthew

From: Bernier, Cynthia -TBI

Sent: May 14, 2009 1:29PM


To: 'Vanstone, Melanie'
Cc: Kronby, Matthew -JLT

s.21 (1 )(b)

Subject: RE: Bankruptcy

From: Vanstone, Melanie [mailto:Melanie.Vanstone@pco-bcp.gc.ca]

Sent: May 14, 2009 1:24PM


To: Bernier, Cynthia -TBI

Subject: RE: Bankruptcy

s.21 (1 )(b)

Melanie Vanstone
mvanstone@pco..:-_QQQ,QQ.,_QQ.
613-957-5447
-----Original Message----From: Cynthia.Bernier@international.gc.ca [ mailto:Cynthia. Bernier@international.gc.ca]
Sent: Thursday, May 14, 2009 1:14PM
To: Vanstone, Melanie
Subject: RE: Bankruptcy

2010-10-28

000435

Message

Page 2 of3

From: Vanstone, Melanie [mailto:Melanie.Vanstone@pco-bcp.gc.ca]

Sent: May 14, 2009 1:11PM


To: Bernier, Cynthia -TBI

Subject: RE: Bankruptcy

5.21 (1 )(b)

Melanie Vanstone
Dl'@_QstonE;!@p~Q::QQQ..g_Q,_Q.f!

613-957-544 7
-----Original Message----From: Cynthia.Bernier@international.gc.ca [mailto:Cynthia.Bernier@international.gc.ca]
Sent: Thursday, May 14, 2009 12:59 PM
To: Vanstone, Melanie
Subject: RE: Bankruptcy

5.21 (1 )(b)

From: Vanstone, Melanie [mailto:Melanie.Vanstone@pco-bcp.gc.ca]

. Sent: May 14, 2009 12:56 PM


To: Bernier, Cynthia -TBI

Subject: RE: Bankruptcy


Thanks.

Melanie Vanstone
mvanstone@pco-bcp.gc.ca
613-957-5447
-----Original Message----From: Cynthia.Bernier@international.gc.ca [mailto:Cynthia.Bernier@international.gc.ca]
Sent: Thursday, May 14, 2009 12:54 PM
To: Vanstone, Melanie; Vanstone, Melanie
Cc: Robert. Ready@international.gc.ca; Vernon. MacKay@international.gc.ca
Subject: Bankruptcy

Hi Melanie,

nave not been able to talk to anyone, but.l was referred to Elizabeth Lang. You may
want to contact her to get the information you were looking for. I will try to talk to her as well.
l

2010-10-28

000436

Message

Page 3 of3

Elisabeth Lang
NDeputy Superintendent, RAC
Industry Canada
Office of the Deputy Superintendent, Regulatory Affairs and Compliance
Telephone: 613-946-2166
Fax:613-946-2168
E-mail: ;E<;U~<:tl?~lh~L<l_D:g@!c:;.ge::~<::_(l
I have not been able to talk to Don yet, but will let you know

Cynthia

5.21 (1 )(b)

-------Cynthia Bernier

Senior Trade Policy Advisor/ Conseillere principale de la politique commerciale


Foreign Affairs and International Trade Canada / Affaires etrangeres et Commerce international Canada
Investment Trade Policy Division (TB!) I Politique commerciale sur l'investissement
111, promenade Sussex
Ottawa, Ontario Canada KlN 1J1
Tel./Tel.: (613) 992-2299
Fax 1 Telk: (613) 944-0679

3)1/ c::~:v~:o~:::~:;~i~=~~:~~:~~:~=

message?

Before printing this e-mail think if it is necessary

2010-10-28

000437

Message

Page 1 of3

Neilson, David
From:

Vanstone, Melanie

Sent:

May 14, 2009 2:44PM

To:

'Matthew.Kronby@international.gc.ca'; Cynthia.Bernier@international.gc.ca

Cc:

sylvie.tabet@international.gc.ca; Kaur Bhinder, Kiran

Subject: RE: Bankruptcy

s.21 (1 )(b)

Thanks
Melanie Vanstone
mvan$ton~@RG_Q:bcp, gc. ea

613-957-5447
-----Original Message----From: Matthew.Kronby@international.gc.ca [mailto:Matthew.Kronby@international.gc.ca]
Sent: Thursday, May 14, 2009 2:26PM
To: Cynthia.Bernier@international.gc.ca; Vanstone, Melanie
Cc: sylvie.tabet@international.gc.ca
Subject: RE: Bankruptcy

s.21 (1 )(b)

For advice on CCAA - it's actually Industry Canada legal counsel (Mark Taggart), not the Trade Law Bureau that
can assist.

-Matthew

From: Bernier, Cynthia -TBI

Sent: May 14, 2009 1:29PM


To: 'Vanstone, Melanie'
Cc: Kronby, Matthew -JLT
Subject: RE: Bankruptcy

s.21 (1 )(b)

2010-11-29

000438

Message

Page 2 of3

From: Vanstone, Melanie [mailto:Melanie.Vanstone@pco-bcp.gc.ca]

Sent: May 14, 2009 1:24PM


To: Bernier, Cynthia -TBI
Subject: RE: Bankruptcy

5.21 (1 )(b)

Melanie Vanstone
mvanstone@pco_~_p~p. gc. ea

613-957-5447
-----Original Message----From: Cynthia. Bernier@international.gc.ca [mailto: Cynthia. Bernier@international.gc.ca]
Sent: Thursday, May 14, 2009 1:14PM
To: Vanstone, Melanie
Subject: RE: Bankruptcy

5.21 (1 )(b)

From: Vanstone, Melanie [mailto:Melanie.Vanstone@pco-bcp.gc.ca]

Sent: May 14, 2009 1:11 PM


To: Bernier, Cynthia -TBI
Subject: RE: Bankruptcy

Melanie Vanstone

mvanstone@pco::!:>cp,gc.ca
613-957-544 7
-----Original Message----From: Cynthia.Bernier@international.gc.ca [mailto:Cynthia.Bernier@international.gc.ca]
Sent: Thursday, May 14, 2009 12:59 PM
To: Vanstone, Melanie
Subject: RE: Bankruptcy

http://doCt1IJ1.fi:J}JCe11trt;,ey~:~n.cQm(P~ges/M~in,;;J,~px?SJJ?==LO?~Redi~t:G~::l

From: Vanstone, Melanie [mailto:Melanie.Vanstone@pco-bcp.gc.ca]

Sent: May 14, 2009 12:56 PM


To: Bernier, Cynthia -TBI

Subject: RE: Bankruptcy


Thanks.

2010-11-29

000439

Message

Page 3 of3

Melanie Vanstone
mvc;mstone@pco:bcp,gc,ca
613-957-544 7

-----Original Message----From: Cynthia.Bernier@international.gc.ca [mailto:Cynthia.Bernier@international.gc.ca]


Sent: Thursday, May 14, 2009 12:54 PM
To: Vanstone, Melanie; Vanstone, Melanie
Cc: Robert.Ready@international.gc.ca; Vernon.MacKay@international.gc.ca
Subject: Bankruptcy

5.21 (1 )(b)
Hi Melanie,

I have not been able to talk to anyone, but I was referred to Elizabeth Lang. You may
want to contact her to get the information you were looking for. I will try to talk to her as well.
Elisabeth Lang
A/Deputy Superintendent, RAC
Industry Canada
Office of the Deputy Superintendent, Regulatory Affairs and Compliance
Telephone: 613-946-2166
Fax: 613-946-2168
E-mail: Elisabeth.Lang@ic.gc.ca
I have not been able to talk to Don yet, but will let you know if I contact the company to get more
information.
Cynthia
<;yntllia ~~rnier _

r1

_____ .

-:J

SeniorTradePoliCY Advisor/ Conseillere principale de la politique commerciale


Foreign Affairs and International Trade Canada I Affaires etrangeres et Commerce international Canada
Investment Trade Policy Division (TBI) 1 Politique commerciale sur l'investissement
111, promenade Sussex
Ottawa, Ontario Canada K1N 1J1
Tel./Tel.: (613) 992-2299
Fax 1 Telk: (613) 944-0679
Email/ Courriel : cynthia.bernier@international.gc.ca
Avez-vous vraiment besoin d'imprimer ce message?
Before pnnting this e-mail think it is necessary

2010-11-29

000440

Page 1 of 1

Message

Vanstone, Melanie
From:

Gilbert, Anne

Sent:

May 19, 2009 9:53AM

To:

Vanstone, Melanie

Subject: FW: NL Press Release on Support for Displaced AB Workers

5.21 (1 )(b)

Melanie,
This just announced.
An ne

Executive Council
Innovation, Trade and Rural Development
May 19, 2009
Protecting Workers: Premier Announces Financial Support to Former AbitibiBowater Workers

The Honourable Danny Williams, Premier of Newfoundland and Labrador, today announced the Provincial Government will
provide financial benefits for workers displaced by the closure of the AbitibiBowater Mill in Central Newfoundland. Benefits
to be provided will include severance for mill workers (unionized and non-unionized), silviculturists and loggers, and certain
entitlements under the Work Force Reduction Program and Early Retirement Allowance program.
Joining Premier Williams at today's announcement were the Honourable Kathy Dunderdale, Minister of Natural Resources;
the Honourable Shawn Skinner, Minister of Innovation Trade and Rural Development; the Honourable Susan Sullivan,
Minister of Human Resources, Labour and Employment; along with Ray Hunter, MHA for Grand Falls-Windsor-SprindaleGreen Bay, and Clayton Forsey, MHA for Exploits.
"As a government, we have been determined to ensure that workers impacted by the closure of this mill are protected to the
greatest extent possible," said Premier Williams. "Many of these individuals have given a lifetime of service to
AbitibiBowater and deserve to be treated with dignity and respect in the face of this closure. Unfortunately, that has not
been the case to-date by the company. Working in the best interests of the people of the province, in December of last year
our government repatriated certain assets related to this mill as a result of the company having broken their contract to
operate in this province. lt is now only appropriate and fair that the workers are not left behind and disadvantaged by
Abitibi's decision to close this operation."
"Given the unique circumstances of government having expropriated related assets, it is now proper and right that workers
receive benefits from this repatriation particularly in the face of the company's inaction," added Premier Williams. "So
beginning today, we will enter into discussions with union representatives to facilitate the allocation of severances and other
financial allowances to the former mill workers and we will determine an appropriate and fair severance for loggers and
silviculturists. This is the right thing to do, and our government is proud to support these workers who have given their lives
to supporting an important industry in this province."
The Provincial Government will work with the Communications, Energy and Paperworkers' (CEP) union and the
International Brotherhood of Electrical Workers (IBEW) to ensure funds are dispersed as quickly as possible. To that end,
the province will provide support to the unions enabling them to make payment to workers for severance and allowances
suspended as a result of AbitibiBowater's creditor protection. Upon conclusion of AbitibiBowater's court proceedings, any
disbursement of payments to the union will be repaid to the Provincial Government.
"AbitibiBowater's financial position has left many Newfoundlanders and Labradorians feeling particularly vulnerable," said
Minister Skinner who is the Chair of the Ministerial Task Force established to respond to the mill's closure. "lt also created a
unique situation and one that required a unique solution. The Provincial Government's support to the workers reflects our
commitment to the Central Region and is a key step in its revitalization. Our task force has done a tremendous amount of
work to-date in collaboration with the impacted communities. We will continue in this spirit of cooperation, as we work to see
the revitalization of the Central Region."

2010-10-28

000441

Page 1 ot

Message

Vanstone, Melania
From:

Gilbert, Anne

Sent:

May 20, 2009 1:31 PM

To:

Vanstone, Melanie

Subject: FW: Premier Williams

Province unlikely to recoup money for


AbitibiBowater workers: Williams
Last Updated: Wednesday, May 20, 2009111:47 AM NTComments7Recommend12

Newfoundland and Labrador Premier Danny Williams doesn't expect the province to recover $35 million given to former
AbitibiBowater employees told they were losing severance payments they were owed.
Premier Danny Williams announced Tuesday that the province is footing the bill for the workers' unpaid severance, which
went into limbo when the company was given creditor protection.
The workers lost their jobs when AbitibiBowater closed the Grand-Falls Windsor mill at the end of March.
AbitibiBowater Inc. was granted bankruptc~ protection in Canada on April17, a day after a Delaware court granted the
company's request for shelter under Chapter 11 of the U.S. bankruptcy code Thursday.
Williams said the payments will apply not only to unionized workers, but to widows and other workers who had their
pensions cut, as well as loggers who weren't entitled to severance in the first place.
The Communications, Energy and Paperworkers union, which represents many of the the former workers, is
fighting AbitibiBowater in court for the money.
"We're going to want to get every penny that this company owes every worker, and we're just going to pay it back
to the government," said Rick Fudge, head of the union local that represents loggers.
If the union wins, it's expected to pay the province back, however Williams said it's probably unlikely that much
of the money will be recovered from the court process.
"When it comes to the workers, unfortunately in these types of proceedings, they are the least secure to the
creditors, which is terrible when you think that they give their lives to a company and they're way down the list on
security because those who give security cover themselves off," he said.
Williams said the payments are justified because the former workers have spent decades contributing to the
economy of central Newfoundland.
"They were going to be left high and dry- some of them with 39, 40 years of service. We felt that was wrong," he said.
The workers had been pushing for the deal for months, suggesting that it come out of the money the province owes
AbitibiBowater for the expropriation of its assets.
The government introduced legislation in December that expropriated the company's timber and water resources in the
province.

2010-10-28

000442

Page 1 of 4

Privy Council Office -C4R


From:

Bernier, Cynthia -TBI -C5

Sent:

May 21, 2009 7:49AM

To:

Privy Council Office -C4R

Cc:

IM Repository I Repertoire de Gl

Subject:

FW: Summary of the Meeting between DFAIT and AbitibiBowater

DFAITCaveat:

DFAITCiassification: 1
OF AITDefaultCCSet: 1

Security /Securite: SECRET/ SECRET


SECRET
PCO : Please pass to Melanie Vanstone urgently.
***********************************

Hi Melanie,
As promised, please find the report of our discussions with AbitibiBowater last week. I would be
happy to respond to any questions you might have.
Have a nice day.
Cynthia
Participants

5.19(1)

AbitibiBowater
Don Stephenson, Assistant Deputy Minister, Trade Policy and Negotiations (TPC), DFAIT
Robert Ready, Chief air Negotiator (ANA), DFAIT
5.14
Matthew Kronby, Senior General Counsel and Director General (JLT) , DFAIT
Cynthia Bernier, Senior Trade Policy Analyst, Investment Trade Policy Division (TBI), DFAIT 5.21 (1 )(b)
SUMMARY: On May 12, 2009, TPC/Stephenson met with AbitibiBowater (AB) to talk about the
NAFTA Chapter 11 litigation and also discussed two other international trade issues that affect the
company: (1) Softwood lumber agreement and (2) the Black Liquor issue. On the NAFTA Chapter
11 case, AB;
explained the current situation to TPC/Stephenson covering the expropriation,
discussions with the provinces and other federal departments, the informal offer made by the
company to DFAIT last April as well as their position on how to resolve the issue. AB/
mentioned that the company was taken by surprise when Premier Danny Williams passed the
legislation to expropriate AbitibiBowater assets in the province of Newfoundland and Labrador
(NFLD).'

5/21/09

000443

Page 2 of 4

J.

NAFTA Chapter 11
On May 12, 2009, TPC/Stephenson met with AbitibiBowater (AB) to talk about the NAFTA
Chapter 11 litigation.
5.14
5.20(1 )(d)
5.21 (1 )(b)
5.21 (1 )(c)

Meeting with other federal deRartments: Since the expropriation took place in December 2008, AB
met with a number of federal departments around town to raise their profile and get political
support to resolve the issue. AB/
mentioned that they have met with NRCan '
Minister's office), Finances Canada (
Minister's office), Environment Canada (Minister's office), PMO 1
as well as Atlantic Canada Opportunities Agency (
Minister's office). In general, it appears that the ministers were supportive.
lS
apparently interested in playing a role to resolve this issue.
5.19(1)

5/21/09

000444

Page 3 of 4

5.20(1 )(d)
5.21 (1 )(b)
5.21 (1 )(c)

Black Liquor: On the Black Liquor issue, AB/


explained that it was a lifeline for
AbitibiBowater in the U.S. and understands that it is also the case for other companies such as
Domtar. AB certainly tries to benefit from it, but understand that it is not going to last longer than
the end of the year. AB/
also stated that the program will be converted into a tax credit for
biomass (section 45 of the US Internal Revenue Code) but the credit would not reach the massive
scale of the current program. He mentioned that we need to have a similar program in Canada and
recommended that Canada review Section 45 and try to build a program that provides similar
treatment.
5.19(1)

Drafted: TBI!Bernier
Consulted : JLT/Kronby ; ANNReady

5/21/09

000445

Page 4 of 4

Blank Page If Page


blanche

5/21/09

000446

Page 447
is withheld pursuant to sections
est retenue en vertu des articles

20(1 )(b), 20(1 )(c), 20(1 )(d)

of the Access to Information Act


de la Acces

a l'information

abitibiA-.
bowaterliaV

ills
vt: . .
i~enogami
. . . .
.

.
000448

---~-

~--

---~-

abitibi A-.

bowaterllaV

F ciliti

000449

Pages 450 to I

a 460

are withheld pursuant to sections


sont retenues en vertu des articles

20(1 )(b), 20(1 )(c), 20(1 )(d)

of the Access to Information Act


de la Acces

a l'information

5.23

Neilson, David
Mondou, lsabelle
July 3, 2009 9:14AM
Bhinder, Kiran Kaur
Abella. Jacob

From:
Sent:
To:
Cc:
Subject:

FW:

Attachments:

FYI.
Isabelle Mondou
Director, Legal Operations
Directrice, Operations juridiques
Office of the Counsel to the Clerk of the Privy Council Bureau du Conseiller juridique
aupres du greffier du Conseil prive
613- 957-5450

-----Original Message----From: Sanderson, Esther On Behalf Of Roy, Yvan


Sent: Friday, July 03, 2009 8:20 AM
To: Mondou, Isabelle; Dorion, Helene
Subject: FW:
pvi
Esther
-----Original Message----From: IMCEAX400-c=CA+3Ba=govmt+2Ecanada+3Bp=gc+2Bdfait+2Emaeci+3Bs=Vanderveen+3Bg=Carrie+
3Bi=J+3B@x400.pco [mailto:IMCEAX400-c=CA+3Ba=govmt+2Ecanada+3Bp=gc+2Bdfait+2Emaeci+
3Bs=Vanderveen+3Bg=Carrie+3Bi=J+3B@x400.pco]
Sent: June 30, 2009 4:30 PM
To: IMCEAX400-c=CA+3Ba=govmt+2Ecanada+3Bp=gc+2Bdfait+2Emaeci+3Bs=D-CMC+3B@x400.pco;
IMCEAX400-c=ca+3Ba=govmt+2Ecanada+3Bp=gc+2Bdfait+2Emaeci+3Bs=D-BSL+3B@x400.pco; IMCEAX400c=CA+3Ba=govmt+2Ecanada+3Bp=gc+2Bdfait+2Emaeci+3Bs=D-MDD+3B@x400.pco; IMCEAX400-c=CA+
3Ba=govmt+2Ecanada+3Bp=gc+2Bdfait+2Emaeci+3Bs=D-MED+3B@x400.pco; IMCEAX400-c=CA+3Ba=govmt+
2Ecanada+3Bp=gc+2Bdfait+2Emaeci+3Bs=D-MEP+3B@x400.pco; IMCEAX400-c=ca+3Ba=govmt+2Ecanada+
3Bp=gc+2Bdfait+2Emaeci+3Bs=d-jld+3B@x400.peo; IMCEAX400-c=CA+3Ba=govmt+2Ecanada+3Bp=gc+
2Bdfait+2Emaeci+3Bs=D-JLT+3B@x400.pco; IMCEAX400-c=CA+3Ba=govmt+2Ecanada+3Bp=gc+2Bdfait+
2Emaeci+3Bs=D-TBI+3B@x400.pco; IMCEAX400-c=CA+3Ba=govmt+2Ecanada+3Bp=gc+2Bdfait+2Emaeci+
3Bs=D-TBB+3B@x400.pco; IMCEAX400-c=CA+3Ba=govmt+2Ecanada+3Bp=gc+2Bdfait+2Emaeci+3Bs=D-TBT+
3B@x400.pco; IMCEAX400-c=CA+3Ba=govmt+2Ecanada+3Bp=gc+2Bdfait+2Emaeci+3Bs=D-TIE+
3B@x400.pco; IMCEAX400-c=CA+3Ba=govmt+2Ecanada+3Bp=gc+2Bdfait+2Emaeci+3Bs=D-TMI+
3B@x400.pco; IMCEAX400-c=CA+3Ba=govmt+2Ecanada+3Bp=gc+2Bdfait+2Emaeci+3Bs=D-TMS+
3B@x400.pco; Docking.David@fin.gc.ca; IMCEAX400-c=CA+3Ba=govmt+2Ecanada+3Bp=gc+2Bdfait+
2Emaeci+3Bs=D-TMW+3B@x400.pco; IMCEAX400-c=CA+3Ba=govmt+2Ecanada+3Bp=gc+2Bdfait+2Emaeci+
3Bs=D-TNR+3B@x400.pco; IMCEAX400-c=CA+3Ba=govmt+2Ecanada+3Bp=gc+2Bdfait+2Emaeci+3Bs=D-TNS+
3B@x400.pco; IMCEAX400-c=CA+3Ba=govmt+2Ecanada+3Bp=gc+2Bdfait+2Emaeci+3Bs=d-tpc+
3B@x400.pco; IMCEAX400-c=CA+3Ba=govmt+2Ecanada+3Bp=gc+2Bdfait+2Emaeci+3Bs=D-TPI+
3B@x400.pco; IMCEAX400-c=CA+3Ba=govmt+2Ecanada+3Bp=gc+2Bdfait+2Emaeci+3Bs=D-TPN+
3B@x400.pco; cal.becker@justice.gc.ca; carolyn.kobernick@justice.gc.ca; IMCEAX400-c=ca+
3Ba=govmt+2Ecanada+3Bp=gc+2Bdfait+2Emaeci+3Bs=bcm+3B@x400.pco; IMCEAX400-c=CA+3Ba=govmt+
2Ecanada+3Bp=gc+2Bdfait+2Emaeci+3Bs=EXTOTT+20+28DMA+29+3B@x400.pco; IMCEAX400-c=CA+
3Ba=govmt+2Ecanada+3Bp=gc+2Bdfait+2Emaeci+3Bs=EXTOTT+20+28DMT+29+3B@x400.pco; IMCEAX4001

000461

c=CA+3Ba=govmt+2Ecanada+3Bp=gc+2Bdfait+2Emaeci+3Bs=EXTOTT+20+28JLA+29+3B@x400.peo;
IMCEAX400-c=CA+3Ba=govmt+2Ecanada+3Bp=gc+2Bdfait+2Emaeci+3Bs=jlh+3B@x400.peo; IMCEAX400c=CA+3Ba=govmt+2Ecanada+3Bp=gc+2Bdfait+2Emaeci+3Bs=EXTOTT+20+28JL0+29+3B@x400.peo;
IMCEAX400-c=CA+3Ba=govmt+2Ecanada+3Bp=gc+2Bdfait+2Emaeci+3Bs=EXTOTT+20+28JUS+29+
3B@x400.peo; IMCEAX400-c=CA+3Ba=govmt+2Ecanada+3Bp=gc+2Bdfait+2Emaeci+3Bs=EXTOTT+20+
28MINT+29+3B@x400.peo; IMCEAX400-c=CA+3Ba=govmt+2Ecanada+3Bp=gc+2Bdfait+2Emaeci+
3Bs=EXTOTT+20+28USS+29+3B@x400.peo; IMCEAX400-c=CA+3Ba=govmt+2Ecanada+3Bp=gc+2Bdfait+
2Emaeci+3Bs=Brason+3Bg=Heather+3B@x400.peo; IMCEAX400-c=CA+3Ba=govmt+2Ecanada+3Bp=gc+
2Bdfait+2Emaeci+3Bs=Grant+3Bg=Heather+3B@x400.peo; Holland.LS@forces.gc.ca;
irit weiser@hc-sc.gc.ca; Janette Mark@pch.gc.ca; KIELLYK@tc.gc.ca; KSabo@justice.gc.ca;
IMCEAX400-c=CA+3Ba=govmt+2Ecanada+3Bp=gc+2Bdfait+2Emaeci+3Bs=McDonald+3Bg=Lynn+
3B@x400.pco; martin.freeman@justice.gc.ca; Michel Francoeur@pch.gc.ca; IMCEAX400-c=ca+
3Ba=govmt+2Ecanada+3Bp=gc+2Bdfait+2Emaeci+3Bs=messar-splinter+3Bg=nebi+3B@x400.pco;
PIGEONJ@tc.gc.ca; richstone.jeff@cb-bc.gc.ca; schwartza@inspection.gc.ca;
smithh@agr.gc.ca; IMCEAX400-c=CA+3Ba=govmt+2Ecanada+3Bp=gc+2Bdfait+2Emaeci+3Bs=Harper+
3Bg=Susan+3B@x400.peo; Thomas.Kevin@fin.gc.ca; william.mcdowell@justice.gc.ca;
Winston.Fogarty@international.gc.ca; IMCEAX400-c=CA+3Ba=govmt+2Ecanada+3Bp=gc+2Bdfait+
2Emaeci+3Bs=D-MER+3B@x400.pco; IMCEAX400-c=CA+3Ba=govmt+2Ecanada+3Bp=gc+2Bdfait+2Emaeci+
3Bs=D-TIC+3B@x400.pco; IMCEAX400-c=CA+3Ba=govmt+2Ecanada+3Bp=gc+2Bdfait+2Emaeci+3Bs=D-TNN+
3B@x400.pco; IMCEAX400-c=CA+3Ba=govmt+2Ecanada+3Bp=gc+2Bdfait+2Emaeci+3Bs=D-TPM+
3B@x400.pco; IMCEAX400-c=CA+3Ba=govmt+2Ecanada+3Bp=gc+2Bdfait+2Emaeci+3Bs=944-HELP-AIDE+
3B@x400.pco; IMCEAX400-c=CA+3Ba=GOVMT+2ECANADA+3Bp=GC+2BJUSTICE+3Bs=Sims+3Bg=John+
3B@x400.pco; IMCEAX400-c=CA+3Ba=GOVMT+2ECANADA+3Bp=GC+2BJUSTICE+3Bs=Barr+3Bg=Ruth+
3B@x400.pco; IMCEAX400-c=CA+3Ba=GOVMT+2ECANADA+3Bp=GC+2BJUSTICE+3Bs=Fothergill+3Bg=Simon+
3B@x400.pco; IMCEAX400-c=CA+3Ba=GOVMT+2ECANADA+3Bp=GC+2BJUSTICE+3Bs=Ruel+3Bg=Simon+
3B@x400.pco; IMCEAX400-c=CA+3Ba=GOVMT+2ECANADA+3Bp=GC+2BHC+2ESC+3Bo=LOTUS+3Bs=MacLeod+
3Bg=Adele+3Bi=L+3B@x400.peo; IMCEAX400-c=CA+3Ba=GOVMT+2ECANADA+3Bp=GC+2BNRCAN+2ERNCAN+
3Bs=LeBlanc+3Bg=Gilles+3B@x400.pco; IMCEAX400-c=CA+3Ba=GOVMT+2ECANADA+3Bp=GC+2BNRCAN+
2ERNCAN+3Bs=Adams+3Bg=John+3B@x400.pco; IMCEAX400-c=CA+3Ba=GOVMT+2ECANADA+3Bp=GC+
2BJUSTICE+3Bs=Sims+3Bg=John+3B@x400.pco; IMCEAX400-c=CA+3Ba=GOVMT+2ECANADA+3Bp=GC+
2BJUSTICE+3Bs=Barr+3Bg=Ruth+3B@x400.pco; IMCEAX400-c=CA+3Ba=GOVMT+2ECANADA+3Bp=GC+
2BJUSTICE+3Bs=Fothergill+3Bg=Simon+3B@x400.pco; IMCEAX400-c=CA+3Ba=GOVMT+2ECANADA+3Bp=GC+
2BJUSTICE+3Bs=Ruel+3Bg=Simon+3B@x400.pco; Roy, Yvan; IMCEAX400-c=CA+3Ba=govmt+2Ecanada+
3Bp=gc+2Bdfait+2Emaeci+3Bs=Bernier+3Bg=Cynthia+3B@x400.pco; IMCEAX400-c=CA+3Ba=govmt+
2Ecanada+3Bp=gc+2Bdfait+2Emaeci+3Bs=Dube+3Bg=Annie+3Bi=F+3B@x400.pco; IMCEAX400-c=CA+
3Ba=govmt+2Ecanada+3Bp=gc+2Bdfait+2Emaeci+3Bs=Carruthers+3Bg=Alicia+3B@x400.pco;
rambod.behboodi@fin.ac.ca; louise.senechal@aqr.gc.ca
Subject: RE:

5.23

<blocked::mailto:danielle.beaulne@international.gc.ca>

Carrie Vanderveen
Counsel/ Avocate
Trade Law Bureau (JLT)/ Direction generale du droit commercial international (JLT)
Foreign Affairs and International Trade Canada/ Affaires etrangeres et commerce
international Canada
2

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Order/Commande

Canacfa

The National Post (Metro Ed, 01'0

82838

r--D-a-te_0_9_.-0-1.-2-0_0_9_ _ _ _ _ _C_i_rc-._1_0_0_6_2_0_ _P_a_g_e_F_P_1_1+---1-/-1- ~

.i

DannyC avez
Gus VAN HARTEN

do, not only againstAbitibi, but also against Dow


Chemical, which recently bl'Ought a X.11r1:1 claim
hey call him Danny Chave:t: because he has for the "'harm" caused it by municipal pesticide
the gtUnption to expropriate Abitibillowater bans in Quebec.
which is, appatenUy, a U.S. investor.
Da.nny wins, above all, because he challenges an
Newfoundland and Labrador agreed inl905 to illegitimate system. NAn:A Chapter 11 is illegitimallO\\' Abitibi to exploit its timber and water. Abi- ate because the arbitrators are not independent
tibi agreed to run paper mills and employ people like judges. They do not have security of tenure.
in U1e province. Abiubi closed the mm in Stephen They are paid by the day. They may practice as
ville, Nfld., three years ago; now it has closed U1e lawyers while working as arbitrators while ad
mm at Grand .Falls. So Premier Danny WiUiams \lising companies. They are.part ofa tiny clique,
populated mostly from the world of commercial
took back tile timber and wate.t:
This was courageous. The legislature of Xew arbitration. Those who study Ulis world refer to it
foundland and Labrador should be applauded as a club or a mafia.
for iL It is about bargaining from strength inConsider that unlike oilier forms of arbitra
stead of weakness. It is true that Canada now tion, only one side can bring the claims under
faces a legal attack under NM'T.o\ Chapter 11. Chapter 11. So, the logical way to grow the in
llut we should not capitulate or pressure Xew dustry is to interpret the t1-eaties to encourage
foundland and Labrador to back down. NM-r.A investors to bring claims . .And, final authority
has weaknesses, above all the illegitimacy of its to appoint tile arbitrators rests usually with the
system of arbitration under which Abilibi will presidentoftbeWorldllank(viatheinternation
bring its claim.
al C~ntre for Sel11ement of lnvesunent Disputes
Abitibi will say that the provincial Iegisla In Washington). Curt-ently this is Robert.Zoeltion offends NA.lr!:A's mles to protect foreign in lick. the former U.S. trade rep.resentalive. Previvestors. That claim will be handed over to three ously it was Paul Wolfowit:G, the former U.S. deparbitrators (read commercial lawyers, for the uty secretary of defense. You get the idea.
most part) and the lawyers will get to work. The
Canada should not have subniitted to this S)'S
arbitrators have the extraordinary power to or tem of arbitration Wlder XA.l.-l"A. During the pri
der Canada to pay public money for Abitibi's lost maries, Barrack Obama demonstrated an interest
profits al"ising from legislative decisions. And to renegotiate NAI<-rA Canadashouldjmnp atthe
their interpretations of NAFTA are insulated opporttmity to rework Chapter 11, at the very least
from review by any court, whether domestic or by subjecting arbitrators to a properly independ
international.
ent process of appeals, as proposed in tile U.S.
Even if canada loses tmder Ni\J:o-l'll., however, Congress six years ago.
Danny Chave~ wins. He wins because Canada
In the meantime, let's support XewfotU1dland
must defend the claim, not Newfoundland and and Labrador for barg-aining from sU-ength and
Labrador, and Ganada must pay any awatd. Can for caning X.l\.lo-r,\'s bluff.
ada did not ask for the provinces' consent when
Financial Post
it signed up to X.l\.lo-11\. And so the federal gov I Gus Van Harten is an Assistant Professor
ernment rightly holds the bag.
at Osgoode Hall Law School
He wins also because he ca11s XA.trl'.~s bluf(
N.AJ:o'1'.1\ Chapter 11 works mainly through fear
and its claims of legilimacy. We are supposed to
fear a company's legal tht-eats and harassment of
om governments. We are supposed to respect the
awards of the arbitrators. But one need not fear a
toothless beast or respect false prophets.
Danny wins because Canada can draw out the
claim, taking Abitibi down all ilie procedural twists
and turns to drive up costs. That is what the U.S.
government does when it fights N.l\.lo?l'A claims by
Canadian firms. Aild that is what C.anada should

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Order/Command"E;l

The Gazette (Montreal, QC)

Canada

Date 09.01.2009

Circ.

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A13

1t1

arest and Harper will show true colours on economy


Can the two conservatives do
what's necessary to intervene?
JOSEE LEGAULT
or the Charest and Harper
F
governments, the moment of
truth is fast approaching. The

next weeks wUl show to what extent the economy is truly their
ultimate priorlt}t
What thE!Y announce will also
tell to what extent they believe in
serious state intervention in
times .of . uncertan;ty. And
whether 'theY'll toss a&lde the zero-deficltdogma and invest to
stimulate }ob creation and
strengthen the social safety net
for the most vulnerable.

For neo-con1deologue Stephen


Harper, the challe~ge will be
harder. Although he s~ economist by. trainblg, he fiillc:;d to see
the looming crisis durmg last
fall's federal election campaign
and even ridiculed Stephane
Dion for presenting a plan action that included a special federal-provincial meeting.
Well, the crisis is here. Having
succeeded in getting the governor-general to shut down Par ment to avoid a non-confi
ce
vote; Harper has now
ed just
such a federal-prov' cial meeting for Jan. lG an e promises a
plan of action lth a budget to
be tabled on J
ZJ.
Hal"per' roblem is that his
own id ogy is about to come
back
't him like a boomerang.
Lo g to reduce the governent's role, he has shrunk the
amount of money in federal coffers since he took power in 2006,
announcing costly cuts in income
taxes and doing away with $12 billion a year in revenue by cutting

of

two GSTpoints.
Harper will have to decide
whether to forgo his emphasis
on the ineffective neo-con prescription of cutting taxes, now
decried even by the World Manetary Fund. Or whether he will
hold his nose and run a hefty
deficit to invest some serious
money in the economy.
But from the looks of those he
picked as his group of 11 economtc advisers- most of whom
are powerful right-leaning business leaders such as Paul Desmarais Jr. _ it will be a mighty
surprise if he does take the interventionist route.
As for Jean Charest, who
an election to get a s nger
mandate to :manage e econo:my, the order

prove to
be a tall one. ~ classic ronservative, al
much more
pragmati
Harper, Charest
will sh his colours with a new
eco
c statement to be tabled
e special three-day mini-seaion of the National Assembly

tique and the new, popular, leftwing Quebec soli.daire MNA


Amir Khadir, he'll be facing a
House much more geared to interventionist policies than when
the right-wing ADQformed the
offtcialopposition.
But the premier also knows
that three days is an awf
short time to agree on w:
do
on the economy while
o taking care of the "b ess of the
House," such
ecting a new

Jan.l.B-15.
But we learned yesterday that
both his finance minister. at;td
economic-development nurus
ter ~ere absent from Wednes
day s cabinet meeting held in
good part to prepare for the special session on the econoiDJt Bemused P;u-ti Quebecois health
critic Bernard Drainville said
"the absence of the government's two lead tenors on the
economy shows a lack of seriousness."
Still, what matters for Charest
is that with his slim majority of
66 seats out of 125, a buoyant PQ,
a decimated Action democra-

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Message

Page 1 of 1

Neifs;on, David
From:

Vanstone, Melanie

Sent:

October 20, 2009 3:21 PM

To:

Bhinder, Kiran Kaur

SubjE!ct:

FW:

Importance:

High

5.13(1)
5.21 (1 )(b)

Attachments: .

Melanie Vanstone
mvanstone@PGO_::QQp.gc.ca
613-95'?-5447
-----Ori1inal Message----From: Robert.Ready@international.gc.ca [mailto:Robert.Ready@international.gc.ca]
Sent: Tuesday, September 29, 2009 3:50PM
To: Vanstone, Melanie

Subjedt: FW:
Importance: High

From: Tabet, Sylvie -JLTB


Sent: September 18, 2009 8:43 AM
To: Ready, Robert -ANA; Bernier, Cynthia -TBI
Subjedt: Fw: ~
Importance: Hlgn
Fyi

From: Stanley, Todd


To: Kronby, Matthew -JLT; Tabet, Sylvie -JLTB 5.19(1)
Cc:
@nalcorenergy.com ;
:lnalcorenergy.com ; Ballard, Donna M.
Sent: Thu Sep 17 14:58:55 2009

5.21 (1 )(b)

Subject:

Todd Stanley
Manager, Corporate and Commercial Unit
Civil Division, Department of Justice
Government of Newfoundland and Labrador
!.709.729.2597 f.709.729.2129
This e-mail (including any attachments) is confidential and is intended only for the use of the addressee(s). The contents of this e-mail may contain personal
information and I or be covered by various forms of privilege, including solicitor/client privilege. Any unauthorized copying, distribution, publication or disclosure is
prohibited. Receipt of this e-mail by anyone other than the intended recipient does not constitute waiver of privilege. If you have received this e-mail in error, please
notify the sender or the Civil Division of the Depattment of Justice, Government of Newfoundland and Labrador and delete all versions of same. Thank you.

"This email and any attached files are intended for the sole use of the primary and copied addressee(s) and may
contain privileged and/or confidential information. Any distribution, use or copying by any means of this
information is strictly prohibited. If you received this email in error, please delete it immediately and notify the
sender."

2010-11-29

000528

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Page 1 of 1

Message

Gilbert, Anne
From:

Vanstone, Melanie

Sent:

December 4, 2009 11 :52 AM

To:

Gilbert, Anne

Subject: RE: AB
Hi Anne

I'll keep you posted.

Melanie Vanstone
rm~sao..Q.tQ.O.~.@P..QQ.:PQQ,_g_Q_,_Q.;;!

5.14
5.21 (1 )(b)

613-957-5447
-----Original Message----From: Gilbert, Anne
Sent: Friday, December 04, 2009 11:49 AM
To: Vanstone, Melanie

Subject: AB
Melanie,
Did you hear if the first meeting went ahead last week ? How did things go ?

An ne

2010-12-06

000542

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Page 1 of2

Vanstone, Melanie
From:

Vanstone, Melanie [Melanie.Vanstone@pco-bcp.gc.ca]

Sent:

February 17, 2010 2:58PM

To:

Vanstone, Melanie

Subject: FW: try this

s.14
s.20(1 )(b)
s.21 (1 )(b)
s.21 (1 )(c)

From: John.O'Neill@international.gc.ca [mailto:John.O'Neill@international.gc.ca]

Sent: February 17, 2010 2:03 PM


To: Vanstone, Melanie

Cc: sylvie.tabet@international.gc.ca; Cynthla.Bernier@international.gc.ca; Raphaelle.LapierreHoussian@ international.gc.ca


Subject: try this

2010-10-28

000546

.Page 2ot2

John O'Neill
Director I Directeur
Investment Trade Policy 1 Politique commerciale sur l'investissement (TBI)
Foreign Affairs and International Trade Canada 1 Affaires etrangeres et Commerce international Canada
Government of Canada 1 Gouvernement du Canada

s.21 (1 )(c)

Tel: .613 944-2427

2010-10-28

000547

s.23

Message

Page 1 of2

Gilbert, Anne
From:

Vanstone, Melanie

Sent:

February 17, 2010 1:20PM

To:

Gilbert, Anne

Subject:
Attachments:

F Yl -will call you


-----Original Message----From: Vanstone, Melanie [mailto:Melanie.Vanstone@pco-bcp.gc.ca]
Sent: Wednesday, February 17, 2010 11:12 AM
To: Vanstone, Melanie

Subject:

Melanie Vanstone
melanie.vanstone@bnet.pco-bcp.gc.ca
613-957-544 7

From: John.O'Neill@international.gc.ca [mailto:John.O'Neill@international.gc.ca]

Sent: February 17, 2010 11:11 AM


To: Vanstone, Melanie
Cc: Cynthia. Bernier@international.gc.ca; Raphaelle.Lapierre-Houssian@international.gc.ca

Subject:
as promised
John O'Neill

From: Tabet, Sylvie -JLTB

Sent: February 17, 2010 10:06 AM


To: 'Ballard, Donna M.'
Cc: O'Neill, John -TBI

Subject: J

Privileged & Confidential

Sylvie Tahet

Gencr;\1 C.ounsel & Director I Avoote g(~neralc et direct rice


Trade Law Bnreau (lL'J) I [)irection generale du droit conunr~n:ial (II,'I)

Tell tt<1 + 1 613.944.1590


Fax. 1 rClec: + l 613.944.0027 1 + l 6l3.944..321J
sylvie.tabet@ intemational.gc.ca

Foreign Affairs and Intematioml Trade Canada


AHaires ctl~mg<'res et Commerce international

Cuuda
Depmtment of Justice I J\.1i.nistere de la Justice
Govcmment of Canada I Gouvnnement: du
Canada

2010-12-06

000548

Page 2 of2

Message

l~difice Lestcr B Pc,u-son Building


125, promenade Sussex Drive
Ottawa ON K lA OG2

CANADA

2010-12-06

000549

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of the Access to Information Act


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a 560

are withheld pursuant to sections


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de la Acces

a l'information

Gloh~,and
'

'

Mail: AhitihiBowater fights Danny Williams with NAFTA challenge

Page Lof2

THE GLOBE AND MAIL 'f!!


February 25, 2010

AbitibiBowater fights Danny Williams with NAFTA


challenge
By Bertrand Marotte
Globe and Mail Update

s.68(a)

25

000561

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Message

Page 1 of2

Vanstone, Melanie
From:

Gilbert, Anne

Sent:

March 10, 2010 9:56AM

To:

Vanstone, Melania

Subject: AB
Melanie,
Below is an editted version of the note for the Clerk's package for his meeting with his NL counterpart (which you
saw last week). I intend to share the note with ACOA VP but wanted tolcheck with you re any sensitivities. I've
already edited out what I think are sensitive parts. Let me know if you have any other concerns.
Thanks,
An ne

AbitibiBowater
Key Messages

lt is unfortunate that AbitibiBowater has rejected the settlement offer by our


respective governments.
Work is being undertaken to review the documentation submitted by the
company as part of the Notice of Arbitration.
It remains to be determined how the Government will proceed. However, it
will be important that our governments continue to work cooperatively.
We need to maintain Canada's, and specifically Newfoundland and
Labrador's NL re utation as a safe and secure lace to invest.

Background
o
On December 16, 2008, the Government of NL passed legislation expropriating
AbitibiBowater assets in the province including land, water and timber rights, but
excluding its pulp and paper mill in Grand Falls-Windsor. On April 23, 2009, the
company filed a Notice of Intent to pursue arbitration under the North American Free
Trade Agreement (NAFTA}, claiming damages of at lease $300 million. The
Government of Canada is the Respondent to any Chapter 11 case.

s.21 (1 )(
b)

s.20(1 )(d)
s.21 (1 )(b)
on february 25, 2010, the company filed a Notice of Arbitration.

2010-10-28

000563

Message

Page 2 of2

The company contends that the province's December 2008 Bill 75, which expropriates
an extensive array of the company's rights and assets, was arbitrary, discriminatory and
illegal under international law. The claim seeks direct compensation for damages of
approximately $500 million, plus additional costs and relief deemed just and appropriate
by the Arbitral Tribunal.
The Atlantic Canada Opportunities Agency (ACOA) has been working closely with the province
and with the community of Grand-Falls Windsor to help with an adjustment to closure ofthe
AbitibiBowater facility. To date, ACOA has approved $8.6 million under the Community
Adjustment Fund for projects benefiting Grand-Falls-Windsor.

2010-10-28

000564

Page 1 of 1

Vanstone, Melanie
From:

Vanstone, Melanie [Melanie.Vanstone@pco-bcp.gc.ca]

5.19(1)

Sent:
To:

March 22, 2010 3:38PM

5.21 (1 )(c)

Vanstone, Melanie

Subject:

FW:

Importance:

High

Attachments: Letter re NAFTA Feb 22 2010.pdf

Melanie Vanstone
melQnle,_Y9ntQn~@R.o.~t.QcQ_~_p_gp~g_c,ca

613-957-5447

From: Emmanuei.Kamarianakis@international.gc.ca [mailto:Emmanuei.Kamarianakis@international.gc.ca]

Sent: February 22, 2010 10:40 AM


To: Jean, Daniel; Sargent, Timothy; Diogo, Brigitte; Vanstone, Melanie; Matthew.Levin@international.gc.ca
Cc: John.O'Neill@international.gc.ca; sylvie.tabet@international.gc.ca; Louis.Levesque@international.gc.ca;
Elaine. Brouca@international.gc.ca

Subject: FW:
Importance: High

From:
To:
Cc:

Sent: Mon Feb 22 09:43:24 2010


Subject:

Please find attached letter, for your consideration.

2010-10-28

000565

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SUPERIOR COURT
CANADA
PROVINCE OF QUEBEC
DISTRICT OF MONTREAL

No:

500-11-036133-094

DATE:

MARCH 31, 2010

PRESENT: THE HONOURABLE MR. JUSTICE CLEMENT GASCON, J.S.C.

IN THE MATTER OF THE PLAN OF COMPROMISE OR ARRANGEMENT OF:


ABITIBIBOWATER.INC.
And
ABITIBI.. CONSOLIIDATED INC.
And
BOWATER CANADIAN HOLDINGS INC.
And

The other Petitioners listed on Schedules "A", "B" and "C"


Debtors
And
ERNST & YOUNG INC.
Monitor
And

HER MAJESTY THE QUEEN IN RIGHT OF THE PROVINCE OF NEWFOUNDLAND


AND LABRADOR
Petitioner
And
HER MAJESTY THE QUEEN IN RIGHT OF THE PROVINCE OF BRITISH COLUMBIA
AND THE ATTORNEY GENERAL OF BRITISH COLUMBIA
Intervening parties

JUDGMENT ON AMENDED MOTION FOR A DECLARATION REGARDING ORDERS


ISSUED PURSUANT TO THE ENVIRONMENTAL PROTECTION ACT (#445)
JG1793

000571

500-11-036133-094

PAGE: 2

INTRODUCTION
{1]
This judgment deals with the impact of potential environmental obligations of a
1
debtor company upon its restructuring process under the CCAA
[2]
On one hand, Her Majesty the Queen in Right of the Province of Newfoundland
and Labrador (the "Province") contends that ministerial orders issued in relation to
environmental matters are not "claims" under the CCAA when they do not require the
Debtors ("Abitibi") to make payments to the Province.
[3]
Therefore, when such orders merely command taking steps to comply with
statutory duties for the protection of the environment, the Province submits that the
resulting obligations imposed upon Abitibi are not subject to compromise under the Act.
[4]
On the other hand, Abitibi considers that when these orders concern pre-filing
liabilities and obligations, and remain in substance financial or monetary in nature, they
are subject to both the stay of proceedings and the claims process contemplated by the

CCAA.
[5]
For Abitibi, to rule otherwise would grant a kind of super-priority status to a
regulatory body for pre-filing claims, since the liabilities arising therefrom would then
remain unaffected by the restructuring process. That would in turn significantly
challenge its ability to successfully emerge from the present CCAA proceedings.
[6]
Whatever the outcome is, the likely consequences for all stakeholders involved
are serious. The potential environmental obligations at issue may entail expending
huge sums of money in remediation costs: at minimum, tens of millions of dollars, quite
probably, well over 100, perhaps, much higher than that.
[7]
As stated by the Monitor-2, amounts of that magnitude are likely to be material to
the estate of Abitibi and to impact on its ability to effect a viable plan of arrangement.
[8]
For an understanding of the context, it is necessary, before analysing each side's
arguments, to review the motion at issue, the positions of the parties involved, and the
applicable factual background and legal framework.
THE MOTION AT ISSUE
[9]
On April 17, 2009, the Court issued an initial order (the "Initial Order") pursuant
to the CCAA with respect to Abitibi. The initial stay of proceedings was first extended to
September 4, 2009, then, to December 15, 2009, afterwards, to March 15, 2010, and
more recently, to June 18, 2010.

Companies' Creditors Arrangement Act, R.S.C. 1985, c. C-36 (the "CCAA").


1
See, Monitor's 34 h Report, dated February 19, 2010.

000572

500-11-036133-094

PAGE: 3

[1 0] During the complex restructuring process undertaken as a result, the Court notably
issued a First Stay Extension Order, on May 14, 2009, and a Claims Procedure Order,
on August 26, 2009.
[11] The First Stay Extension Order included, at the request of the Attorney General
for Canada, the following amendment to the Initial Order:
10.1. ORDERS that the aforementioned stay cannot be interpreted as to restrict
or prevent Her Majesty the Queen, or her agents, from exercising powers, rights
or duties in relation to matters involving public health, safety, security, public
order or the environment aga1nsfthe Petitioners, the Partnerships, the Property,
the Directors or others, providing that an~ financial or monetary fines or orders
shall be stayed.
- -~-------~-----...............

_~~

[12] As for the Claims Procedure Order, its purpose was to set up a claims procedure
for Abitibi's creditors. /Paragraph 3(t) thereof defined "Claim". That definition was
similar, if not identical, to that used in the vast majority of similar orders issued in CCAA
proceedings over the recent years:
"Claim" means any right or claim of any Person against one or more of the
Canadian Petitioners or Partnerships in connection with any indebtedness,
liability or obligation of any kind whatsoever of one or more of the Canadian
Petitioners or Partnerships, whether reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal,
equitable, secured, unsecured, present, future, known or unknown, by guarantee,
surety or otherwise, and whether or not such right is executory or anticipatory in
nature, including without limitation any claim arising from or caused by the
repudiation by a Canadian Petitioner or Partnership of any contract, lease or
other agreement, whether written or oral. the commission of a tort {intentional or
unintentional), any breach of duty (legal, statutory, equitable, fiduciary or
otherwise), any right of ownership or title to property, employment, contract, a
trust or deemed trust, howsoever created, any claim made or asserted against
any one or more of the Canadian Petitioners or Partnerships through any affiliate,
or any right or ability of any Person to advance a claim for contribution or
indemnity or otherwise with respect to any grievance, matter, action, cause or
chose in action, whether existing at present or commenced in the future, based in
whole or in part on facts which existed on the Canadian Filing Date, together with
any other claims of any kind that, if unsecured, would constitute a debt provable
in bankruptcy within the meaning of the Bankruptcy and Insolvency Act, R.S.C.
1985, c. B-3; pr~vided that "Claim" shall not include any Excluded Claim.

[13] Paragraph 15 stated in turri that unless otherwise ordered by the Court, any
creditor who did not deliver a proof of claim Tr1 accordance w1th paragraphs 10, 12 and
13 of the Cla1ms Procedure Order would be forever barred from asserting such against
Abitibi. Accordingly, such a claim would be extinguished for good, with no entitlement to
vote on, or receive any distribution from, any plan.

000573

500-11-036133-094

PAGE: 4

(14] On November 12, 2009, the Province, through its Minister of Environment and
3
Conservation (the "Minister"}, issued five (5} Ministerial Orders (the "EPA Orders"}
4
against Abitibi pursuant to s. 99 of its Environmental Protection Act (the "EPA")
[15] The EPA Orders were in relation to five (5) sites located in Newfoundland and
Labrador ("NL") where Abitibi had carried on industrial activities at different times
between 1905 and 2008. In essence, they purported to order Abitibi to perform, at its
own expense, the following:
(a)

the submission for approval by the Province, by January 15, 2010, of a


detailed Remediation Action Plan for all sites identified as allegedly having
exceedances greater than the applicable limits;

(b}

the completion of the approved site remediation actions by January 15,


2011, or by another date as may be agreed upon with the Province's
Department of Environment and Conservation ("ENVC"}; and

(c)

the closure of all landfills and lagoons/impoundments associated with


each site by January 15, 2011.

[16] On the day of issuance of the EPA Orders, the Province served the Motion for a ((
Declaration Regarding Orders Issued Pursuant to the Environmental Protection Act (the
"EPA Motion") that is the object of this judgment.
[17] In the EPA Motion, the Province asserts that the First Stay Extension Order does
not prevent the federal or provincial governments from exercising their powers, rights or
duties in relation to public health, safety, security, public order or the environment, save
for the financial or monetary fines or orders issued by these governments that remain
stayed as a result of the Initial Order.
[18] This notwithstanding, the Province maintains that it is possible to interpret the
Claims Procedure Order in such a manner that renders it inconsistent with the First Stay
Extension Order. For instance, according to the Province, whereas the First Stay
Extension Order permits it to issue non-monetary orders requiring Abitibi to comply with
statutory environmental obligations;-ffie--Cialfris-proceaiTreo-fder appears to bar,
extinguish or otherwise affect the enforceability of such orders.
[19]

To avoid this result, the Province, by the EPA Motion, seeks a declaration:
(a)

3
4

that the Claims Procedure Order shall not bar, extinguish or affect the
enforceability of orders made against the Debtors, the Property or the
Directors (all as defined in the Initial Order) by the federal or provincial
governments pursuant to their exercise of powers, rights or duties in
relation to matters involving public health, safety, security, public order or

Exhibit NL-6.
S.N.L. 2002, c. E-14.2.

000574

PAGE: 5

500-11-036133-094

the environment, provided that any financial or monetary fines or orders


may be affected by the Claims Procedure Order; and
(b)

that the EPA Orders are not barred or extinguished and their enforceability
is not affected by the Claims Procedure Order, in particular, by paragraphs
3(t) and 15 thereof.

THE POSITIONS OF THE PARTIES

1) The Province 5

[20] For the Province, the EPA Orders are in relation to the environment. They are
not financial or monetary fines or orders and cannot be qualified as "claims" under the
CCAA. They simply require Abitibi to take steps to comply with its statutory obligations
for the protection of the environment.
6

[21] In this respect, the Province relies on some decisions that have ruled that similar
non-monetary statutory obligations, being public duties owed to the community in
general, are not "claims provable" under the 8/A since the enforcing authority does not
act as a "creditor" of the person owing the duty.
[22] As such, the Province argues that the EPA Orders fall within the ambit of
paragraph 10.1 of the First Stay Extension Order and are neither stayed nor subject to
the claims process. lt adds that it could not have been the intention of the Court to
issue a Claims Procedure Order with terms that conflict with and undermine the First
Stay Extension Order.
[23] In the alternative, if the Court intended for the Claims Procedure Order to
nevertheless bar, extinguish or otherwise affect the enforceability of orders like the EPA
Orders, the Province considers that the Court acted outside of its statutory jurisdiction.
[24] The Province pleads that these orders are within its constitutional competence.
Conversely, the ability to bar, extinguish or otherwise affect their enforceability is not
within the constitutional competence of Parliament. Therefore, to the extent that
paragraph 15 of the Claims Procedure Order affects this enforceability, it is
constitutionally ineffective.

5
6

See, Amended Motion for a Declaration Regarding Orders Issued Pursuant to the Environmental
Protection Act, dated February 15, 2010.
Notably, Panamericana de Biennes Y Servicios (Receiver of) v. Northern Badger Oil & Gas Ltd.,
(1991) 81 D.L.R. {4th) 280 (Aita C.A.) ("Panamericana"), leave to appeal to the Supreme Court
refused; Strathcona (Country) v. Fantasy Construction Ltd. (Trustee of}, (2005) 261 D.L.R. {4th) 221
(Aita Q.B.) and {2005) 256 D.L.R. (4th) 536 (Aita Q.B.) ("Strathcona"); Canada Trust Co. v. Bulora
Corp., (1980) 39 C.B.R. (N.S.) 152 (Ont. C.A.) ("Bulora"), affirming (1980) 34 C.B. R. (N.S.) 145
(Ont. S.C.).

000575

PAGE: 6

500-11-036133-094

[25] In that regard, the Province served a Notice of Intention pursuant to Article 95
C. C.P. to the Attomey Generals for Canada and all the other provinces, indicating that it
was hereby seeking a declaration that:
(1)
a court vested with jurisdiction over a company pursuant to the CCAA
does not possess the constitutional competence to exercise a statutory or
discretionary power to bar or extinguish liabilities, obligations or duties owed to a
province arising out of laws enacted by its legislature pursuant to s. 92 of the
Constitution Act, 18677 , save and except to the extent that the liability, obligation
8
or duty is a "claim provable" within the meaning of s. 2 of the BIA ;
(2)
a court vested with jurisdiction over a company pursuant to the CCAA
does not possess the constitutional competence to exercise a statutory or
discretionary power to fetter the discretion of a Minister of a provincial Crown
under a law validly enacted by that province; and

(3)
the Quebec Superior Court does not have the constitutional competence
to exercise a statutory or discretionary power under the CCAA to bar the
enforcement of or to extinguish the non-monetary EPA Orders issued by the
9
Province or to fetter the discretion of the Minister under the EPA
2) The Intervening Parties

10

[26] As a result of this Notice of Intention, Her Majesty the Queen in right of the
Province of British Columbia ("HMQBC") and the Attorney General for British Columbia
(the "AGBC") intervened to support the EPA Motion. The other Attorney Generals did
not.
[27] From a factual standpoint, the situation in British Columbia ("BC") is, however,
quite different than the one prevailing in NL. Even though the Debtors still own
properties in that province, HMQBC confirmed that in BC, no orders of any sort are
outstanding against Abitibi in terms of environmental obligations.
[28] Nevertheless, HMQBC and the AGBC elected to intervene herein because,
similarly to the Province, they are concerned about the definition of "Claim", be it in the
Claims Procedure Order or as such definition may be carried forward into Abitibi's
proposed plan of arrangement or in any other orders in these proceedings.
[29] HMQBC submits that any such definition is not, as a matter of statutory
interpretation, within the meaning of "claim" under the CCAA, nor otherwise
contemplated to be subject to compromise or arrangement under that Act. Accordingly,
:
9

10

30 & 31 Vict., c. 3 (U.K), reprinted in R.S.C., 1985, App. 11, no 5 (the "Constitution Act, 1867').
Bankruptcy and Insolvency Act, R.S.C., 1985, c. B-3 (the "8/A").
lt is worth noting that the Province never contested the Claims Procedure Order, nor did it lodge any
appeal against it. As one of the numerous parties appearing on the Service List, it had been made
aware of its existence.
See, Intervention, dated January 12, 2010.

000576

500-11-036133-094

PAGE: 7

it would be beyond the jurisdiction of the Court, through any order containing or
adopting such a definition, to purportedly capture, compromise, enjoin future
proceedings respecting and/or extinguish any statutory non-monetary obligations arising
under a provincial or federal enactment.
[30]

On the constitutional issue raised by the Province, the AGBC adds that:
(a)

the CCAA should not be interpreted in a manner that would exceed the
proper bounds of the ability of Parliament, under s. 91 of the Constitution
Act, 1867, to make laws on matters of bankruptcy and insolvency. lt
should not be interpreted so as to impair the operation of a validly enacted
provincial legislative scheme and intrude into the provinces' exclusive
authority under s. 92 of that Act. lt would be contrary to those principles if
the CCAA was interpreted to support orders based on or including the
definition of "Claim" used in the Claims Procedure Order. The CCAA, and
the definition of "claim" in that Act, are properly interpreted not to include
statutory non-monetary obligations of Abitibi under any provincial
enactment;

{b)

in CCAA proceedings, the Court's jurisdiction to rule provincial enactments


inapp~icable or inoperative is predicated on the application of doctrines of
constitutional law. lt would be contrary to these doctrines for the Court {i)
to give effect to a law or purpose of Parliament that is not within or
necessarily incidental to the powers granted under s. 91 (21) of the
Constitution Act, 1867, or (ii) to apply the CCAA to impair the operation of
provincial legislative schemes enacted pursuant to the powers granted to
provinces under s. 92 of the Act. Hence, it would be beyond the Court's
jurisdiction to render any provincial enactment creating statutory nonmonetary obligations constitutionally inapplicable to or inoperative in
respect of Abitibi through any order approving the definition of "Claim"
used in the Claims Procedure Order; and

{c)

it is beyond the ability of Parliament to make laws on or necessarily


incidental to matters of bankruptcy and insolvency empowering a court in
proceedings under the CCAA to effectively engage in a judicial review of
the exercise of statutory powers under provincial enactments. lt is
therefore beyond the jurisdiction of the Court to make orders or
declarations affecting or enjoining, other than temporarily, any regulatory
body proceedings or decisions relating to statutory non-monetary
obligations of Abitibi.

3) Abitibi 11

[31] Abitibi contests the EPA Motion and concludes that it should be dismissed
entirely. Moreover, it seeks itself a declaration confirming that:
11

See, Amended Contestation, dated January 20, 2010.

000577

500-11-036133-094

PAGE: 8

(a)

the EPA Orders are stayed by the stay of proceedings issued in the Initial
Order and are not subject to the narrow exception provided at paragraph
10.1 of the First Stay Extension Order; and

(b)

the Province's filing of any claim based in whole or in part on the EPA
Orders is now barred by paragraph 15 of the Claims Procedure Order,
such that no extension of the Claims Bar Date should be granted to allow
the latter to file a claim on that basis in the claims process.

[32] Abitibi takes the position that the EPA Orders are in pith and substance financial
or monetary in nature. They were thus issued in violation of both the Initial Order and
First Stay Extension Order. As the EPA Orders are not exempted from the stay of
proceedings, Abitibi says that there is no basis to grant the conclusions of the EPA
Motion that, in effect, would give the Province a preference over the other creditors.
[33] Abitibi pleads that the EPA Orders primarily concern assets that are no longer in
its power, possession or control.
[34] Three of the five EPA Orders relate to assets which, on December 16, 2008,
have been unilaterally expropriated without comfensation by the Province pursuant to
its Abitibi-Consolidated Rights and Assets Act1 That being so, in respect of these
assets, it is the Province that bears the primary environmental responsibility as the
"person responsible" under its own legislation.
[35] For Abitibi, the EPA Orders are, consequently, nothing more than a thinly
disguised demand for money, in effect asking it to improve the value of the confiscated
property for the benefit of Its "illegitimate" new owner, the Province.
[36] Abitibi adds that by suddenly issuing the EPA Orders, the Province displayed a
total lack of impartiality and was in a situation of conflict of interest, as the EPA Orders
were clearly designed to enhance the property value of lands confiscated from Abitibi
and now allegedly owned by the Province.
[37] With respect to the two other sites at issue, Abitibi contends that it ceased
conducting any active business on these lands well prior to the commencement of the
CCAA proceedings. As such, the two EPA Orders pertaining to these assets are
fundamentally monetary in nature as well: they seek to compel Abitibi to expend
material sums of money for assets not used in its business and with no net value.
[38] As a matter of fact, Abitibi submits that these assets are in the process of being
disposed of, failing which they will be placed in the hands of a receiver prior to Abitibi's
emergence from these CCAA proceedings. Durin~ the hearing of the EPA Motion,
Abitibi indeed served a specific Motion in that regard 3 .
12
13

S.N.L. 2008, c. A-1.01 {the "Abitibi Act'').


See, Motion for the issuance of an Order Authorizing the Sale of Non-core Properties, dated February
25, 2010.

000578

500-11-036133-094

PAGE: 9

[39]

In short, Abitibi argues that it either is, or will shortly be, nothing else than a
former owner or occupier in respect of all of the assets that are the subject matter of the
EPA Orders.
[40] That being so, Abitibi suggests that, by their true nature, the EPA Orders are
financial or monetary orders. Their real intended effect is to require millions of dollars of
expenditures of creditor money for the improvement of lands confiscated by the
Province or which will shortly be placed in the hands of a receiver.

[41] In light of the bad faith displayed by the Province in issuing the "tactical" EPA
Orders, as well as its unlawful and confiscatory actions in relation to the Abitibi Act,
Abitibi states that the Court should not grant the Province any extension of the Claims
Bar Date. Rather, lby failing to file a claim in due course, the Province deliberately and
knowingly chose to ignore the Claims Bar Date established by the Claims Procedure
Order. . As a result, Abitibi concludes that all the Province's claims in that regard are
now barred.
[42] Key groups of creditors of Abitibi support its position herein. They include the
Term Lenders, the Senior Secured Noteholders. and the Ad Hoc Committee of the
Bondholders. The Monitor also supports the position of Abitibi for the dismissal of the
EPA Motion. The Monitor does not express any view, however, on the issue of the
extension, if any, of the Claims Bar Date for the benefit of the Province.
THE FACTUAL BACKGROUND14

[43]

The factual background relevant to the debate revolves around three issues: the
industrial activities of Abitibi in NL, the enactment of the Abitibi Act and the EPA Orders.

1) Abitibi's Industrial Activities in NL

[44]

Abitibi is one of the world's largest publicly traded pulp and paper manufacturers.
lt produces a wide range of newsprint and commercial printing papers, market pulp and
wood products. lt owns interests in or operates pulp and paper facilities, wood products
facilities and recycling facilities located in Canada, the United States, the United
Kingdom and South Korea.

[45] From approximately 1905 to the end of 2008, it carried on extensive industrial
activities in NL. These activities extended from mining and processing minerals, to
cutting and milling timber, to making wood pulp and paper products, to shipping and
storing materials, and to related activities.
[46]
14

These activities were carried on at several locations in NL (the "Abitibi Sites"):

The Province, the Intervening Parties and Abitibi agree that the record is properly constituted of 1} the
written proceedings filed by each one, all duly supported by affidavits, 2) Exhibits NL-1 to NL-16 and
D-1 to D-6, 3} the Monitor's 341h Report of February 19, 2010, and 4) the viva voce testimonies of two
witnesses, Mrs. Ballard for the Province and Mrs. Minville for Abitibi.

000579

PAGE: 10

500-11-036133-094
(i) mining and processing of minerals: at Buchans;

(ii) pulp and paper operations: at Grand Falls-Windsor and Stephenville;


(iii) shipping and storing: at Botwood; and
(iv) logging camps: at many different locations across NL.
[4 7] According to the Province, Abitibi's industrial activities resulted in the release of
substances into th1e environment in amounts, concentrations and at rates which have
caused and could continue to cause an adverse effect both on and adjacent to the
Abitibi Sites. As far as the Province. is concerned, by the spring of 2009, Abitibi had not
fulfilled all of its obligations under the EPA with respect to these Abitibi Sites.
[48] Conversely, for Abitibi, merely in the fifteen years prior to the end of 2008, it had
spent approximately $138.5 million in environmental compliance or remediation efforts
in NL. These investments in assessments, environmental compliance or remediation
activities have been, with rare exceptions, made on its own initiative, without the
requirement or necessity of ministerial action. Abitibi considers it has been proactive in
its efforts to ensure that its operations were fully in compliance with prevailing
environmental requirements in NL
[49] For examplet, Abitibi's investments in environmental compliance, assessment and
remediation over the past decade included the following:
(a)

environmental assessments and clean-ups


Stephenville, Botwood and Grand Falls);

(at

woodland

(b)

decornmissioning and clean-up activities (at Stephenville);

(c)

mill effluent treatment plant improvements


requirements (at Stephenville and Grand Falls);

(d)

mill air emissions control improvements related to discharge requirements


(at Stephenville and Grand Falls); and

(e)

activities related to environmental sustainability including land donations


(at Botwood and woodlands), the Exploits River Salmon Diversion
Program, reforestation and forest improvements.

related

to

camps,

discharge

[50] Abitibi believes it has always placed a high value upon its enviro~mental
compliance efforts in areas where it has carried on business. lt emphasizes that it has
made concerted efforts to anticipate environmental issues rather than merely react to
orders. This includes environmental site assessment work and remediation work at
many of the Abitibi Sites.

000580

500-11-036133-094

PAGE: 11

[51] Abitibi adds that during all those years of industrial activities, it founded and built
communities, roads, schools and hospitals. By way of example, the town of Grand
Falls-Windsor was founded and originally owned by one of its predecessors.
2) The Abitibi Act

[52] Notwithstanding this long history of industrial activities, since December 2008,
Abitibi has had no material active operations in NL, save for the orderly closure of its
Grand Falls mill.
[53] Effectively, on December 4, 2008, Abitibi announced the closure of its last
remaining mill operation in NL, located at Grand Falls-Windsor. Following this mill
closure scheduled to be effective March 2009, Abitibi would have normally retained
valuable hydroelectric facilities, hydroelectric rights, lands and other assets in NL.
[54] However, despite this, on December 16, 2008, twelve days after this
announcement, the Province introduced and passed within a single day the Abitibi Act.
Pursuant to this Act, the Province purported:
a)

to seize with immediate effect substantially all of the assets, property and

undertakings of Abitibi in NL;

b)

to cancel substantially all outstanding water and hydroelectric contracts


and agreements between Abitibi and the Province;

c)

to cancel pending legal proceedings of Abitibi against the Province


seeking the return of several hundreds of thousands of dollars in
unlawfully assessed payments in respect of water rights;

d)

to deny Abitibi any compensation for the seized assets; and

e)

to deny Abitibi access to the Province's courts to seek redress.

[55] Amongst the assets so confiscated were certain hydroelectric facilities only
partially owned by Abitibi and subject to third party debt obligations. The substantial
interests of such thkd parties were similarly expropriated in the sweep of the Abitibi Act.
[56] Without surprise, the Abitibi Act was strongly criticized and denounced by Abitibi.
To put it mildly, the relationships between the Province and Abitibi have apparently
been quite difficult since then.
[57] For its part, the Province considers the Abitibi Act to be constitutional, even
though it is retrospective, targeted and confiscatory in nature15 . In contrast, Abitibi
views the enactment as contrary to fundamental principles of the Canadian Charter of
15

To that end, it refers notably to British Columbia v. Imperial Tobacco Canada Ltd., [2005] 2 S.C.R.
473, at 503-504.

000581

500-11-036133-094

PAGE: 12

Rights and Freedoms and the Canadian Bill of Rights, as well as being unconstitutional.
lt considers it to be punitive, confiscatory in nature and repugnant to public policy16

[58] While the Province argues that the potential claims of Abitibi against it as a result
of the Abitibi Act ar1e without merit, the latter maintains that if the Province ever files any
claim in the restructuring process, the Court will have to assess the value of its crossclaims or set-off claims against the Province for this wrongful expropriation.
[59] According to Abitibi, its losses resulting from the enactment of the Abitibi Act well
exceed $300 million. The most valuable assets confiscated by the Province include:
(a)

surface rights which the Province had offered to purchase from Abitibi for
$19.3 million in November 2008;

(b)

Abitibu's 51% interest in Star Lake Hydro Partnership, a joint venture with
CHI Hydroelectric Company Inc. ("CHI"), which owns and operates the
Star Lake Hydroelectric Project. At the time of expropriation, Abitibi had
agreed to sell its interest to its partner CHI in a transaction that was days
away from closing. In her testimony, Mrs. Minville assessed the value of
that interest at some $60 million;

(c)

Abitibi's 49% interest in the Exploits River Hydro Partnership, a


partnership with Central Newfoundland Energy Inc., which operates the
Bishop's Falls hydroelectric facility and a part of the Grand Falls
hydroelectric facility. Again, in her testimony, Mrs. Minville assessed the
value of that other interest at about $74 million;

(d)

Abitibi's remaining wholly-owned interest in the Grand Falls hydroelectric


facilities; and

(e)

Abitibi's wholly-owned interest in the Buchans hydroelectric facility.

[60] Although the Province publicly announced that the Abitibi Act did not include the
Grand Falls mill then still in operation, a review of the Abitibi Act revealed that, whether
deliberately or as a result of the haste in which the Act was drafted, the Grand Falls mill
site was, in fact, included in the confiscated assets.
Whether due~ to its haste or by design, the Province did not, however, expropriate
certain assets then owned by Abitibi in NL. These consist primarily of the former
Botwood shipping terminal site, closed in February 2009, and the Stephenville
newsprint mill, idled in October 2005 and closed in December 2005.

[61]

16

Amongst others, it invokes Reference Upper Churchill Water Rights Reversion Act, [1984] 1 S.C.R.
297 and Laane & Baltserv. Estonian S.S. Line, [1949] S.C.R. 530.

000582

500-11-036133-094

PAGE: 13

[62] In April 2009, Abitibi 17 filed a Notice of Intent to Submit a Claim to Arbitration
under Chapter 11 of the North American Free Trade Agreement ("NAFTA"} for the
losses arising from this confiscation effected by the Province. At the hearing, the Court
was advised that since the negotiations failed to result in an acceptable amount of
compensation, Abitibi officially filed, on February 25, 201 0, a Notice of Arbitration under
Chapter 11 of NAFTA to pursue its claim for redress.
[63] In her testimony, Mrs. Ballard confirmed that the Province had not paid so far any
compensation to Abitibi as a result of these expropriations.
[64] According to Abitibi, its claim for compensation under NAFTA includes almost no
material amounts in respect of any of the assets that are the subject of the EPA Orders.
The only incidence:s of overlap are the claims for the confiscated surface rights and the
Grand Falls mill site.

3) The EPA Orderu


i) the sequence of events
[65] Meanwhile, on June 12, 2009, the Province asked Abitibi to provide certain
18
reports for the Abitibi Sites, including environmental site assessment ("ESA") reports
[66] On June 18, 2009, Abitibi replied that the Province's request would remain under
consideration in liglht of (a) the Abitibi Act, (b) the Initial Order issued by the Court and
(c) another pending ministerial order concerning Buchans 19
[67] In this letter, Abitibi's Counsel noted that efforts to comply with Abitibi's
obligations under the EPA were, in any event, ongoing. In a subsequent letter dated
August 14, 2009, Abitibi again acknowledged its ongoing environmental obligations
pursuant to the EPA 20 .
[68] In July 2009, in order to apparently ensure that it had complete and accurate
information about the environmental condition of the Abitibi Sites and that Abitibi's
obligations to protect the environment would be fulfilled, the Province's attorneys
retained the services of environmental consultants, Conestoga-Rovers & Associates
("CRA"), to undertake ESAs at the Abitibi Sites.
[69] CRA was able to begin its assessment work at one of the Abitibi Sites, Buchans,
in the latter part of July 2009. However, it needed to obtain access to the remaining
Abitibi Sites in order to complete its work. On September 3, 2009, after extensive
11

18
19
20

Even though headquartered in Montreal, QC, AbitibiBowater inc. is a U.S. corporation formed under
the laws of Delaware.
Exhibit NL-1.
Exhibit NL-2.
Exhibit NL-3.

000583

500-11-036133-094

PAGE: 14

negotiations, Abitibi and the Province entered into an agreement whereby Abitibi would
provide access to the Abitibi Sites to CRA for the purpose of conducting the ESAs,
subject to a number of conditions21 .
[70] Again, Abitibi indicated that its position was subject to further consideration in
light of (a) the Abitibi Act and (b) the Initial Order issued by the Court.
[71] On October 16, 2009, while these exchanges were taking place, the Province
filed a Motion for a Declaration that the Petitioner is entitled to Access the Electronic
Data Rooms Created by the Debtors (the "Data Room Motion").
[72] In that motion, the Province alleged that it needed to access the electronic data
rooms of Abitibi to properly assess its financial status and make informed decisions in
the restructuring. lt maintained that it had a duty to inform itself of the present and
future potential ability of Abitibi to cover the Province's claims.
[73] In particular, the Province argued that Abitibi was responsible towards it for
alleged environmental contamination from the mine located in Buchans. Relying on
numerous media reports that it then filed in the record, the Province claimed that
because of Abitibi's economic activities, the latter had exposed itself to many
environmental obligations, the precise extent of which remained unclear.
[74] The Province notably alleged that it had incurred significant costs in that regard.
lt added, furthermore, that agreements had been entered into for the Province's
environmental consultants to have access to the sites for the purpose of determining the
full nature and extent of Abitibi's environmental obligations.
[75] On November 9, 2009, the Court dismissed the Data Room Motion with costs.
The Province did not appeal that ruling.
[76] The Court notably concluded that the Province had not yet provided reasonable
and convincing evidence in support of its alleged status of potential creditor for
environmental problems resulting from Abitibi's economic activities.
[77] The Court emphasized that the Province wanted access to the electronic data
rooms not to enhance the restructuring process, but to assess the extent of Abitibi's
present and future ability to cover its undetermined and potential environmental claims
that had yet to be filed in the claims process:
[88] Lastly, the alleged legitimate public interest relied upon by the Province is
not in furtherance of the purposes of the CCAA. lt is, to the contrary, in
furtherance of the Province's own interest of determining the real value of its
potential claims that are yet to be established.

21

Exhibit NL-4.

000584

500-11-036133-094

PAGE: 15

[891 Put otherwise, the Province wants to have access to the electronic data
rooms to better evaluate whether Abitibi's pockets will, one day, be deep
enough22
[78] While this Data Room Motion was being debated and ruled upon, CRA issued, in
November 2009, the reports setting out the results of its ESAs on each of the Abitibi
Sites. These reports concluded that the Abitibi Sites covered by the assessments (and,
in many instances, the property adjacent thereto) suffered from extensive contamination
allegedly in excess of applicable standards23 .

ii) the orders issued

[79]

Accordingly, on November 12, 2009, three days after the dismissal of its Data
Room Motion, the Province issued against Abitibi the EPA Orders 24 pursuant to s. 99 of
the EPA, requiring it to submit detailed Remediation Action Plans for approval by
January 15, 201 0 atnd to complete the approved site remediation actions by January 15,

2011.
[80] lt is not disputed that the EPA Orders were in respect of liabilities or obligations
that existed prior to the commencement of the CCAA proceedings. None of the sites
related to any active operations of Abitibi from or after the date of the Initial Order. The
orders were all in n~spect of past matters.
[81] The evidence indicated that a "base case" re mediation plan could cost Abitibi in a
range of value from the mid-to-high eight figures. A ''worst case" to "extreme case"
scenario could be several times higher.

[82] The evidence showed as well that the EPA Orders were inappropriate in their
sequencing and unrealistic in their scheduling:

22
23
24

(a)

to submit detailed Remediation Action Plans as requested would have


required close to a full year to be carried out adequately;

(b)

the closure of all landfills and lagoons or impoundments associated with


each site being logically the last task to perform when a remedial action
plan iis implemented, requiring Abitibi to close these units no later than
January 15, 2011 was unrealistic;

(c)

given the magnitude and scope of the work ordered by the Province to be
carried out simultaneously at the five locations targeted in the EPA
Orders, based on Abitibi's past experiences with such projects in NL, it
was doubtful that there existed sufficient resources (engineering firms,
specialty providers, laboratories and authorized specialty contractors) to
carry out the work within the prescribed one-year time frame.

AbitibiBowater Inc. (Re the Plan of Compromise or Arrangement of), 2009 QCCS 5482.
Exhibit NL-5.
Exhibit NL-6.

000585

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PAGE: 16

[83]

On January 11, 2010, Abitibi appealed the EPA Orders to the Minister. On
February 8, 2010, the Minister dismissed the appeals25 Of course, the initial deadline
of January 15, 2010, for Abitibi to file its Remediation Action Plans was not abided by.

[84] According to Abitibi, the EPA Orders stem from a desire to "throw the book" at
Abitibi with a view to seeing what, if anything, may stick for purposes of offsetting
Abitibi's well-known compensation claims.
[85]

Since the adoption of the Abitibi Act, Abitibi considers that the Province has
indeed used the full range of its powers, including the misuse of discretionary authority
granted under the EPA, to wage a campaign of retribution and harassment against it,
with the apparent goal of dissuading Abitibi from pursuing its claims for compensation.

[86]

For Abitibi, what was dredged up in this process included matters that were, to
the Province's knowledge, the responsibility of third parties. Often, they related to
situations that had been known for decades. Moreover, with some limited exceptions,
the Abitibi Sites at issue are on lands that have been confiscated by the Province
pursuant to the Abitibi Act, when they were not surrendered to the latter years ago.
[87] In the case of such lands that are not in its possession anymore, Abitibi suggests
that it has likely no power to comply with the EPA Orders. lt cannot realistically access
lands in the poss1~ssion of third parties (including the Province) to complete the
remediation orderecl by the EPA Orders.

[88] Even if it has the right, based on procedural fairness and natural justice, to
challenge the EPA Orders, Abitibi states that its well-known reality is quite different.
Given that it is under CCAA protection, it considers that it is precluded, from a practical
standpoint, from seeking a judicial review of the EPA Orders. The time and costs
associated with challenging them would significantly drain Abitibi's limited resources and
the potential recovery for all of its stakeholders.
[89]

Of course, the Province refutes these assertions. In its view, the EPA Orders are
merely the result of the proper exercise of the Minister's statutory duties and powers
under the EPA. Be it as current or former owner, Abitibi is a "person responsible" under
the EPA. What is being required in the EPA Orders simply derives from Abitibi's
industrial activities in NL.

iii) the CRA !Reports


That said, thE~ EPA Orders are based on the CRA Reports26 that relate to the five
sites where there are alleged violations of the EPA, namely Grand Falls-Windsor,
Stephenville, Botwood, Buchans and the Logging camps.

[90]

25
26

Exhibit NL-14.
Exhibit NL-5.

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PAGE: 17

(91] Abitibi contends that the failures and weaknesses evident in the CRA Reports
lead to the reasonable inference that they were commissioned for the purpose of
providing support for political decisions already taken, rather than for the purpose of
forming a good faith view of the matter.
[92] While it is certainly not the role of the Court to analyze in details these reports
upon which the EPA Orders were issued, in assessing the true nature of these orders,
the Court cannot, however, ignore the following general observations that appear from a
superficial review of these reports:
(a)

each CRA Report states that it was prepared for the Province's
NAFTA/CCAA Counsel, WeirFoulds LLP. They were thus, apparently,
produced for litigation purposes rather than in pursuit of a statutory duty;

(b)

the CIRA Reports consistently fail to distinguish between lands owned or


operated by Abitibi and those owned or occupied by third parties; and

(c)

the CRA Reports, in the absence of applicable criteria identified in the


Province's regulations, apply environmental standards from the provinces
of Ontario and BC, which, according to Abitibi, technically do not apply as
they are not adapted to NL distinctive hydro geological characteristics.

[93] In addition, the following particular highlights coming from these CRA Reports
are worth mentioning at this stage.
[94] The CRA Report concerning the Grand Falls-Windsor site focuses primarily on
anticipated issues that would arise as and when the mill site is actually
decommissioned. Yet, although the Province is no doubt aware that it is now the owner
of the Grand Falls mill site as a result of its Abitibi Act, it has issued the EPA Order in
respect thereof only to Abitibi, not to itself.
[95] With respect to the Stephenville site mill, Abitibi's operations were shut down in
December 2005. Between 2006 and 2008, Abitibi completed a decommissioning and
demolition program that included the levelling of the majority of the main mill buildings
and related infrastructure. Since the closure of the mill, it has allegedly expended some
$2 million in environmental assessments and site clean up.
[96] lt is not seemingly disputed that substantial portions of the Stephenville mill
served as the Harmonville Base of the United States Air Force ("USAF") between 1941
and 1966. During that time, several fuel storage and dumpsites for by-products of the
air force base were apparently established.
[97] Moreover, in the late 1960s, the Province passed legislation that allowed for the
construction of a kraft linerboard mill in Stephenville, which was taken over and
operated by a Crown corporation, Labrador Linerboard Limited ("Linerboard"), from
1972 to 1977. This linerboard mill was ultimately closed in 1979 when it was purchased
by Abitibi, converted to a pulp and paper production mill and operated as such until its
closure in 2005.

000587

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PAGE: 18

[98] On December 18, 2008, simultaneously with the Abitibi Act, the Province
revoked the agreement for the timber supply rights in relation to the Stephenville mill by
7
passing the Labrad'or Linerboard Limited Agreement 1979 Repeal Acf-
[99] In view of this background, Abitibi estimates that a substantial portion of the
costs associated with the remediation of the Stephenville site are directly attributable to
the 25 years of intensive use of the site by USAF and Linerboard, under the
stewardship and responsibility of the Province.
[100] Yet, acc.ording to Abitibi, despite being the lessor of the Stephenville site to th
USAF and the owner of the Crown corporation for the former linerboard operation, the ,
Province has made no effort to establish its own level of responsibility under the EPA,
nor has it taken any steps to pursue itself, USAF or Linerboard under the Act.
'

[1 01] Turning to the CRA Report concerning the Botwood site, it refers to an are
around the Town of Botwood where Abitibi formerly had a storage and shipping
operation relating to its Grand Falls mill.
[1 02] The Botwood Report does not, however, limit itself to Abitibi's operations at
Botwood. lt also reviews the following:
(a)

storage and shipping operations utilized by ASARCO, a corporation


unrelated to Abitibi or its predecessors, for its mining operations at
Buchans, which CRA erroneously conflated with Abitibi for the purposes of
the Botwood Report;

(b)

the bed of a railway (the Botwood - later Grand Falls - Central Railway)
owned and operated by a company which has now been dissolved
following the transfer to third parties of its property interests; and

(c)

stora~~e and other facilities transferred to the Town of Botwood in the

1980's and used for storage of construction materials, vehicle servicing


and other activities, including an area for a community mail box.
[1 031 Similarly to the situation prevailing for the Stephenville site, these other parties
were not targeted by the EPA Orders concerning the Botwood site.
[1 041 As to the Buchans site where Abitibi's operations ceased in 1984, it was part of
the original lands granted in 1905 under a "Charter Lease" to the Anglo-Newfoundland
Development Company, a company that merged with Abitibi's predecessor in 1961.
Mining operations were developed on certain lands at Buchans in the 1920s as part of a
joint venture with a predecessor of ASARCO, under an agreement pursuant to which
the latter operated ~he mine.

27

S.N.L. 2008 c. 42, filed as Exhibit D-2.

000588

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PAGE: 19

[1 05] The land beneath the Town of Buchans was surrendered to the Province by
grants in 1978 and 1979. In 1994, most of the remaining interests of Abitibi in the area
surrounding Buchans were also relinquished to the Province following the ending of
mining operations by ASARCO in the early 1980's. In 2005, ASARCO filed for Court
protection under Chapter 11 of the U.S. Bankruptcy Code.
[1 06] At the time of the passage of the Abitibi Act, Abitibi retained some residual
surface and timber rights in the area, as well as a small 2 MW hydroelectric power
station near the town.
[1 07] Here again, neither ASARCO nor the Town of Buchans was included in the
scope of the EPA Orders.
[1 08] Finally, the CRA Report concerning the Logging camps allegedly recounted an
inspection of some forty-eight (48) camps. Development and use of the Logging camps
by Abitibi began in the 1940s and continued until recently. However, Abitibi only has
active records for twenty (20) Logging camps, which have all been closed after 1965.
[109] As it only has active records of twenty (20) such camps closed since 1965,
Abitibi considers that the other twenty eight (28) logging camps investigated by CRA are
either not its logging camps, or date back to decades when horse power was the
predominant source of power in the camps and few, if any, refueling sites were likely to
have existed.
[11 0] The Logging camps report does not segregate the impact of third party activities
from what may have resulted from Abitibi's prior activities. Yet, many such sites have,
after dismantling and clean up by Abitibi, been used for other purposes by third parties,
including seasonal fishing or snowmobile camps, cottages and other similar activities.
[111] In fact, soil cmd other samples were taken by CRA at only six of the locations,
with no method of distinguishing whether results obtained were attributable to these
subsequent activities or to the original logging camps.
[112] For Abitibi, the lack of objectivity and "directed verdict" nature of the EPA Orders
is shown by the Lak~e Ambrose logging camp, at s. 2.2.3 of the Logging Camps Report.
[113] After noting in the report that chainsaws and motorized vehicles were not used in
the logging operations of Abitibi until the late 1950's (as prior operations were performed
using horse and man power), and after noting the closure of this camp in the mid1950's, the report nevertheless went on to attribute various readings of fuel
contamination to Abitibi's operations.
[114] The fact tha1t the Lake Ambrose site is currently used recreationally and that
there are nearby cottages was not considered at all in the Logging camps report.
[115] Between Abitibi, who had not operated on the site for fifty years and used only
horse power and man power, and current recreational dwellers, most likely with power

000589

500-11-036133-094

PAGE: 20

boats, snowmobiles, A TV's, automobiles and generators, the Province still chose the
probable source for the observed contaminations of waste oil, fuel and similar items as
being Abitibi.

[116] For Abitibi, this telling example gives a good idea of what the Province is ready to
accept and do under the circumstances.
THE LEGAL FRAMEWORK

[117] This factual background summarized, the legal framework relevant to this case
includes, besides the paragraphs of the First Stay Extension Order and Claims
Procedure Order referred to before, statutory provisions from both the CCAA and the
B/A, as well as sections of the EPA.
1) The CCAA and the 8/A

[118] The term "c:laim" is defined as follows in the CCAA (as applicable to this
restructuring):
Definition of "claim"

12. (1) For the purposes of this Act, "claim" means any indebtedness, liability or
obligation of any kind that. if unsecured, would be a debt provable in bankruptcy
within the meaning of the Bankruptcy and Insolvency Act.
Determination of amount of claim

(2) For the purposes of this Act, the amount represented by a claim of any
secured or unsecured creditor shall be determined as follows:
(a) the amount of an unsecured claim shall be the amount:

[... ]
(iii) in the case of any other company, proof of which might be made
under the Bankruptcy and Insolvency Act, but if the amount so provable
is not admitted by the company, the amount shall be determined by the
court on summary application by the company or by the creditor; and[ ...]
(Our emphasis)

[119] The reference to "debt provable" is a misnomer. lt is commonly agreed that it is


rather meant to refer to the expression "claim provable" of the 8/A. Under s. 2 of the
8/A, "claim provable in bankruptcy", "provable claim" or "claim provable" include any
claim or liability provable in proceedings under the BIA by a creditor. Pursuant to s.
121(1) of the B/A, "c:laims provable" and "contingent claims" consist of:
Claims provable

121. (1) All debts and liabilities, present or future. to which the bankrupt is subject
on the day on which the bankrupt becomes bankrupt or to which the bankrupt
may become subject before the bankrupt's discharge by reason of any obligation

000590

500-11-036133-094

PAGE: 21

incurred before the day on which the bankrupt becomes bankrupt shall be
deemed to be claims provable in proceedings under this Act.

Contingent and unliquidated claims


(2) The detennination whether a contingent or unliquidated claim is a provable
claim and the valuation of such a claim shall be made in accordance with section

135.
(Our emphasis)

[120] Aside from that, both the CCAA and the BIA contain provisions pertaining to
environmental costs and claims, which state the following:

Priority of claims
(8) Any claim by Her Majesty in right of Canada
or a province against a debtor company in
respect of which proceedings have been
commenced under this Act for costs of
remedying any environmental condition or
environmental damagE~ affecting real property of
the company is secured by a charge on the real
property and on any other real property of the
company that is contiguous thereto and that is
related to the activity that caused the
environmental condition or environmental
damage, and the charge

Priority of claims
(7) Any claim by Her Majesty in right of Canada or
a province against the debtor in a bankruptcy,
proposal or receivership for costs of remedying
any environmental condition or environmental
damage affecting real property or an immovable of
the debtor is secured by security on the real
property or immovable affected by the
environmental condition or environmental damage
and on any other real property or immovable of
the debtor that is contiguous with that real
property or immovable and that is related to the
activity that caused the environmental condition or
environmental damage, and the security

(a) is enforceable in accordance with the law of


the jurisdiction in which the real property is
located, in the same way as a mortgage,
hypothec or other security on real property; and

(a) is enforceable in accordance with the law of


the jurisdiction in which the real property or
immovable is located, in the same way as a
mortgage, hypothec or other security on real
property or immovables; and

(b) ranks above any other claim, right or charge


against the property, notwithstanding any other
provision of this Act or anything in any other
federal or provincial law.

(b) ranks above any other claim, right, charge or


security against the property, despite any other
provision of this Act or anything in any other
federal or provincial law.

Claim for clean-up costs

Claim for clean-up costs

(9) A claim against a debtor company for costs of


remedying any environmental condition or
environmental damage affecting real property of
the company shall be a claim under this Act,
whether the condition arose or the damage
occurred before or aftm the date on which
proceedings under this Act were commenced.

(8) Despite subsection 121(1}, a claim against a


debtor in a bankruptcy or proposal for the costs of
remedying any environmental condition or
environmental damage affecting real property or
an immovable of the debtor shall be a provable
claim, whether the condition arose or the damage
occurred before or after the date of the filing of the
proposal or the date of the bankruptcy.

(Our emphasis)

000591

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500-11-036133-094

[121) Finally, it is worth noting that amongst the new amendments to the CCAA that
came into force on September 18, 2009, the following provision dealing with regulatory
bodies was added:
Meaning of "regulatory body"

11.1 (1) In this section, "regulatory body" means a person or body that has powers,
duties or functions relating to the enforcement or administration of an Act of
Parliament or of the legislature of a province and includes a person or body that is
prescribed to be a regulatory body for the. purpose of this Act.
Regulatory bodies -

order under section 11.02

(2) Subject to subsection (3), no order made under section 11.02 affects a regulatory
body's investigation in respect of the debtor company or an action, suit or proceeding
that is taken in respect of the company by or before the regulatory body, other than
the enforcement of a payment ordered by the regulatory body or the court.
Exception

(3) On application by the company and on notice to the regulatory body and to the
persons who a1re likely to be affected by the order, the court may order that
subsection (2) not apply in respect of one or more of the actions, suits or
proceedings taken by or before the regulatory body if in the court's opinion
(a) a viable compromise or arrangement could not be made in respect of the
company if that subsection were to apply; and
(b) it is not contrary to the public interest that the regulatory body be affected by
the order made under section 11.02.
Declaration -

enforcement of a payment

(4) If there is a dispute as to whether a regulatory body is seeking to enforce its


rights as a creditor, the court may, on application by the company and on notice to
the regulatory body, make an order declaring both that the regulatory body is seeking
to enforce its rights as a creditor and that the enforcement of those rights is stayed.

2) The EPA
[122] Turning to the EPA, s. 7 provides that a person shall not release or permit the
release of a substance into the environment in an amount that may cause an adverse
effect. S. 99 allows for the issuance of orders where the Minister believes on reasonable
grounds that a person responsible has contravened or will contravene the EPA:
99. (1) Where the minister believes on reasonable grounds that a person
responsible has contravened or will contravene this Act or the terms or conditions
of an agreement, approval, amended or varied approval, licence or an
undertaking exempted or released under this Act, the minister may, whether or
not that person has been charged or convicted in respect of the contravention,
issue an order. in writing, requiring a person at that person's own expense, to

000592

PAGE: 23

500-11-036133-094

(a) ,ltop or shut down an activity or an undertaking immediately,


permanently. or for a specified time, where, with respect to that activity or
undertaking, there has been a contravention of this Act, the regulations or
a term or condition applicable to that activity or undertaking;
(b) do all things and take all steps that are necessarv to control.
manaqe. eliminate. remedy or prevent an adverse effect or an
environmental effect and to comply with this Act, the regulations or terms
or conditions applicable to an approval, activity or undertaking in
accordance with directions set out in the order;

( ... )
and there shall be served on the person responsible a copy of the order and a
statement showing the reasons for the making of the order and upon receipt of
the copy and statement, that person shall comply with the order.
( ... )

(3)
In addition to other requirements that may be included in an order issued
under this Part, an order may contain provisions
(a)

requiring a person. at that person's own expense, to


(i)

maintain records on a relevant matter and report periodically to


the minister or a person appointed by the minister,

(ii)

hire an expert to prepare a report for submission to the


minister or a person appointed by the minister,

(iii)

submit to the minister or a person appointed by the minister. a


proposal. plan or information specified by the minister setting
out an action to be taken by the person,

(iv)

prepare and submit a contingency plan,

(v)

undertake tests, investigations, surveys and other action and


report results of these to the minister, and

(vi)

take another measure that the minister considers necessary to


facilitate compliance with the order or to protect or restore the
environment;

(b) 13Stablishing the manner, method, or procedures to be used in


carrying out the measures required by the order; and
(c) establishing a time within which a measure required by the order is
to be commenced and the time within which the measure, order or a
portion of the measure or order must occur.
( ... )
(Our emphasis)

000593

PAGE: 24

500-11-036133-094

[123] S. 102 further provides that the Minister may do the following to insure
compliance of the orders issued:

102. (1) Where an order is served upon the person to whom it is directed. that
person shall comply with the order immediately or, where a period of compliance
is specified in the order, within the time period specified.
(2)
Where~ a person to whom an order is directed does not comply with the
order or part of the order or service of that order cannot be carried out, the
minister may take whatever action he or she considers necessary to carry out the
terms of the order.
(3)

Where~

the minister

(a)

takes an action under subsection (2) to carry out the terms of an


01rder; or

(b)

iflCurs costs. expenses or charges in order to investigate and


monitor the compliance of a person with an order,

the reasonabl1e costs. expenses or charges incurred by the minister in taking that
action are recoverable by the minister from the person to whom the order was
directed as a debt owed to the Crown and the minister shall notify the person
against whom the order is made of his or her determination of the amount of the
recoverable costs, expenses and charges.
( ... )
(Our emphasis)

[124] Finally, a "person responsible" is defined in the EPA (s. 2 (x)) as including,
amongst others:
(i)

the owner of a substance or thing,

(ii)

the owner or occupier of land on which an adverse effect has occurred or


may occur,

(iii)

the owner or operator of an undertaking,

(iv)

a previous owner of a substance or thing.

( ... )
(Our emphasis)

THE QUESTIONS AT ISSUE

[125] Based on this review of the motion at issue, the positions of the parties involved,
and the applicable factual background and legal framework, the questions to be
resolved in this case can be summarized as follows:

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500-11-036133-094

PAGE: 25

a) what is the true nature of the EPA Orders? Are they orders issued in regard of
statutory non-monetary obligations of Abitibi or orders that are in substance
financial or monetary in nature?
b) if the EPA Orders are orders issued in regard of statutory non-monetary
obligations of Abitibi, does the Court have either the statutory jurisdiction or
constitutional authority to include them in the definition of "Claim" found in the
Claims Procedure Order?
[126] Both the Province and the HMQBC agree that if the EPA Orders are financial or
monetary in nature as opposed to pure regulatory orders, they then fall within the
meaning of claim under the CCAA and provable or contingent claim under the BIA. A
claims process such as the one ordered in this restructuring can therefore cover them.

ANALVS IS AND DISCUSSION


1) Overview

[127] Contrary to Abitibi, the Province and the HMQBC did not put much emphasis on
the factual context relevant to the questions at issue. With all due respect to their
position, the Court considers that this case must, in the end, be decided first and
foremost taking into consideration the particular fact pattern in dispute.
[128] To that end, nobody truly contests that in facilitating the conclusion of an
arrangement under the CCAA, the Court has jurisdiction to subject "claims" to a claims
process and to determine who Abitibi's "creditors" might be in that regard. In doing so,
the Court can certainly seek to uncover the true nature of the EPA Orders. Their proper
characterization is within the jurisdiction of the Court.
j

[129] Despite being framed as "regulatory orders", the EPA Orders have the effect of /
compelling Abitibi to expend material sums of money to remediate property that it eithe~r.
no longer owns or no longer uses in its business, while having little or no net value to
Abitibi and its stakeholders.
[130] In the Court's opinion, based on the evidence filed in the record, the EPA Orders
are in substance financial or monetary in nature. Consequently, they are not exem
.... pted
from the First Stay Extension Order or the Claims Procedure Order.
[131] As a result, the monetary consequence~~~~~de;-should -b~---tre;ted ..
claims in these CCAA proceedings. Such claims shall be subject to compromise and
the Province, if it asks and is allowed to file a late proof of claim in this respect, shall be
entitled to participate in the negotiation of, and to receive its pro-rata distribution under,
any plan of arrangement to be filed by Abitibi.

i
.

as---/"'
i
j

\
i

[132] There is, accordingly, no basis in fact or in law to grant the conclusions sought in
the EPA Motion. This would have the effect of giving the Province a preference over
other creditors, which is simply unacceptable.

000595

PAGE: 26

500~ 11 ~036133-094

[133] To reach this conclusion, the Court relies on many considerations, including:
- The provisions of the CCAA;
- , The true nature and impact of the EPA Orders;
- The factual context of their issuance and their content;
- The Province's behavior prior and after their issuance;
- The EPA and the applicable case law; and
- The end result of the Province's position.
[134] In view of this conclusion, it is not necessary to discuss the Province's and the
Intervening Parties' other arguments on the lack of statutory jurisdiction or constitutional
authority for the Court to include statutory non-monetary obligations in the definition of
"Claim" found in thE~ Claims Procedure Order.
[135] As the Court concludes that the Province's EPA Orders are indeed claims
because of their obvious financial and monetary nature, the determination of these other
questions will have to wait another day, if not another restructuring. Declaratory
judgments and quE~stions of statutory jurisdiction or constitutional authority should not
be issued or decided in a factual vacuum. As shown here, the facts involved are
normally critical in assessing such matters.
[136] This finding entails the dismissal of the Intervention of HMQBC and the AGBC as
well.
[137] Abitibi rematins in ownership and occupation of the relevant properties it still
possesses in BC. No orders of any sort and no notice of non-compliance are
outstanding in reg1ard of any environmental obligations of Abitibi in that province.
Simply put, there are no pending issue to resolve between Abitibi and the Intervening
Parties.
[138] This being so, the conclusions sought by Abitibi in its Amended Contestation will
be granted, albeit only in part. The Court considers that it is premature to immediate!
rule that the Province is barred from filing_an~m in the claims process as
ifariawli9'iiSuCJi':
result of the Ef5A-c'rders. This issue will be addressed,
request is in fact presented.

1rneecJlo,

[139] The Court's explanations follow.

2)The CCAA
[140] lt is widely accepted that the CCAA is a remedial statute. Its purpose is to
facilitate the making of a compromise or arrangement between an insolvent debtor and

000596

500-11-036133-094

PAGE: 27

its creditors. The goal is for the former to be able to continue in business and avoid the
28
devastating social and economic consequences of a cessation of operations .
[141] In any restructuring conducted under the CCAA, the courts must keep in mind
these key objectives, while also giving weight to these broader socio-economic or public
interest considerations. As it happens, CCAA courts in Canada have generally found
considerable interpretive flexibility in the provisions of the CCAA to enable them to
29
facilitate the achievement of its purposes
[142] To that end, any analysis of the CCAA must be guided by "the modem rule" of
statutory interpretation. Pursuant to this rule, "[t]he words of an Act are to be read in
their entire context and in their grammatical and ordinary sense harmoniously With the
30
scheme of the Act, the object of the Act, and the intention of Parliament"
[143] Likewise, in exercising its jurisdiction in a broad and flexible manner to insure the
CCAA 's effectiveness, the Court must remember that its role is one of judicial oversight.
lt is expected to supervise the process and keep it moving towards its ultimate goal, that
of an acceptable arrangement. In doing so, it has a broad jurisdiction to decide all
matters that arise and to create an orderly environment for the restructuring. This
would, no doubt, be negatively affected if, for instance, debtors were forced to expend
resources to deal with claims outside of the CCAA process.
[144] Applying these considerations to the situation at hand, the Court is of the view
that it has the authority to decide if the EPA Orders qualify as claims under the CCAA
and can be described as provable or contingent claims under the 8/A.
[145] In that regard, the CCAA contains no restrictive definition of "creditor'' other than
the circular definitiion of "unsecured creditor" to mean any "creditor" who is not a
secured creditor. S. 12(1) of the CCAA further defines "claim" in the broadest possible
terms as "any indebtedness, liability or obligation of any kind, that, if unsecured, would
be a debt (sic) provable in bankruptcy". In fact, under s. 12(2)(a), the "amount of an
unsecured claim shall be the amount[ ... ] (iii) [ ... ]proof of which might be made" under
the 8/A.
[146] As for the 8/A, s. 2 similarly has a non-exhaustive definition of "claim provable in
bankruptcy" which "'includes any claim or liability provable in proceedings under this Act
28

29

30

Stelco Inc., (Re), (2005) 9 C.B.R. (5th) 135, 2005 Canlll8671 (Ont. CA), at paras 32ff; Metcalfe &
Mansfield Alternative Investments 11 Corp., (Re), 2008 Canlll 587 (Ont. CA), at paras 44-61; Cliffs
Over Maple Bay Investments Ltd. v. Fisgard Capital Corp., 2008 Canlll327 (B.C.C.A.), at paras 2729; Hongkong Bank of Canada v. Chef Ready Foods Ltd., {1990) 51 B.C.L.R. (2d) 84 (B.C.CA), at
para. 22. See also SARRA, Janis, Rescue! The Companies' Creditors Arrangement Act (Toronto:
Thompson Carswell, 2007), at p. 9.
See, for instance, A TB Financial v. Metcalfe & Mansfield Alternative Investments 1/ Corp, 2008
CanLII 587 (Ont. C:A), pertaining to third parties releases in a plan of arrangement.
See, Bell ExpressVu Ltd. Partnership v. Rex, [2002] 2 S.C.R. 559, at para. 26, and Rizzo v. Rizzo
Shoes Ltd., [1998] 1 S.C.R. 27, at para. 21.

000597

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PAGE: 28

by a creditor". Ss. 121 and 135 also define provable or contingent claims in very broad
terms.

[147] The amended CCAA does not depart from this scheme. If anything, it reconfirms the intentionally broad and remedial goals of the Act, with terms that place in
the courts' hands the powers necessary to secure its ends.
[148] Accordingly, environmental obligations arising from a regulatory order that
remain, in a particular fact pattern, truly financial and monetary in nature can be
qualified as claims under the CCAA. Likewise, if one is convinced that there exists, in
such a fact pattern, a claim that "might" be filed, it is open to be compromised on the
plain reading of s. 12 of the CCAA.
[149] Regarding this, the principles that generally apply to the determination and
compromise of contingent claims under the CCAA process can apply to claims like
those arising from the EPA orders. Contingent claims may be compromised under the
CCAA and the Court has the authority to decide if a contingent claim exists by reason,
for instance, of past obligations.
[150] While not applicable to these proceedings, s. 11 .1 of the amended CCAA is
instructive on this matter of jurisdiction. lt operates to limit the broad jurisdiction of the
court to stay proceedings (under what is now s. 11.02 of the amended CCAA) in relation
to regulatory bodies.
[151] However, ev1en s. 11.1 does not contain any bright line between regulatory and
financial orders. S. 11.1 (2) restricts the power of the court in its general stay under s.
11.02 from impacting regulatory proceedings "other than the enforcement of a payment
ordered by the regulatory body". S. 11.1 (3) allows the supervising court to remove this
restriction on the gemeral stay power if (i) it is of the opinion that "a viable compromise
or arrangement could not be made in respect of the company" if the restriction were to
apply, and (ii) making such an order is not contrary to the public interest.
[152] Further, s. 1'1.1{4) reserves to the court the power to decide when a regulatory
body is seeking to enforce rights as creditor.
[153] These amendments make two points quite clearly.
[154] First, the structure of the amended CCAA is as follows: (i) a general stay power
is granted in s. 11.02 (in language identical to s. 11 (3) of the CCAA applicable here); (ii)
the general stay is initially restricted from applying to regulatory proceedings other than
payment orders (similarly to the First Stay Extension Order here); and (iii) that restriction
may be lifted by the court after a hearing.
[155] lt follows from this that the general stay power in s. 11.02 of the amended CCAA
(s. 11(3) of the CCAA) does permit the court to order a stay of regulatory proceedings,

000598

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PAGE: 29

the only change being that a second hearing is required to stay any proceedings other
than "a payment ordered".

[156] Second, the court, not the regulatory body, decides when a body is "seeking to
enforce its rights as a creditor" and if so found, the court may stay that as well.
[157] Parliament has therefore confirmed .that the CCAA may be employed to place an
appropriate check on regulatory actions, particularly when they are purely "monetary
orders". This is exactly the kind of jurisdiction the Court is exercising here. Of course,
this exercise requin~s the Court looking at substance over form.
[158] From that standpoint, it is true that the Province has sought to frame the EPA
Orders so as to fall within the limited environmental exemption of paragraph 10.1 of the
First Stay Extension Order.
[159] Yet, an examination of their consequences, their content, the Province's behavior
regarding them and the statutory framework within which they were issued show that
they are and were rnost likely intended to be in substance financial or monetary orders.
3) The True NaturEt and the Impact of the EPA Orders

[160] The true re~~ulatory character or otherwise financial and monetary nature of a
given order is inflwanced by who issues the order, who stands to benefit from it, what
remains its genuine~ objective and what means of enforcement truly exist in reality.
[161] Although presented as injunctive orders, the facts demonstrate that the practical,
intended and inescapable result of the EPA Orders was the creation of monetary
claims. Money is, clearly, the only remedy in this case. In fact, given the lack of assets
or activities of Abitibi in the Province, the EPA Orders can, in all likelihood, only be
enforced by action 1taken outside NL.
[162] In this case, the true character of the EPA Orders must be assessed in the
context of the assets of Abitibi having been expropriated by the Province and Abitibi no
longer being in control of the bulk of the property that gave rise to the remediation
orders.
[163] The monetary nature of the orders is indeed highlighted by the fact that they
relate, for the most part, to properties that the Province has confiscated under the Abitibi
Act or that Abitibi has otherwise surrendered possession or control of years ago.
[164] This situation is quite different from that of an existing owner of lands being
asked to remedy an environmental condition in respect of ongoing operations. While
the latter might be said to derive a corresponding benefit from the expense incurred
arising from the improvement to the lands thereby occasioned, a former owner or a
victim of confiscation has no such benefit.

000599

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[165] In her testiimony, Mrs. Minville confirmed the obvious: decommissioning or


remediation costs are normally offset by the added value eventually regained in the
subsequent divestiture of the equipment, metal and real estate involved. Provided, of
course, that you are still the owner. Otherwise, compliance with such an order is an
expense devoid of any direct or indirect benefit.
[166] In the presemt situation, as the current owner of most of the lands in respect of
which the remediation expenses have been ordered, the Province ends up being the
intended beneficiary of the expenditures that it has used its discretion to order.
[167] In essence, the EPA Orders seek to require Abitibi to incur costs for the primary
purpose of improviing the value of lands, the bulk of which have been confiscated (and
much of the remainder of which was surrendered to the public years ago). Put
otherwise, Abitibi is expected to spend money to increase the value of properties for the
b~ry~fiLoUhose.)Nho.toQkJbemfromit.
...'" .... '"----- ... ___ . __ ....
,
/
\,

[168] This is, at a minimum, rather awkward. The expression "having your cake and
eat it too" comes to mind. Some would go as far as to say that it is preposterous.

-.....,__

. ......................................-------'""""""""'""'-''"'""""'""""-"~ -""'""~---- ..-"'''''"'"""-"'"--~---""---""


rtegr-~etfiafas it may, this definitely justifies, at the very least, the Court, as opposed

to the regulator involved, ascertaining the exact nature of the EPA Orders and deciding
whether the Province is, in reality, seeking to enforce rights as a creditor. This is
precisely what the amended CCAA has now codified at s. 11.1 (4).
[170] While the dividing line between regulatory claims and their financial
consequences may be blurred at times, there can be no confusing the two when the
regulatory authority is seeking to make orders concerning solely past actions and
activities in relation to properties that the debtor has disposed or been dispossessed of.
[171] The broad CCAA and BIA provisions referred to above contain no comfort for a
regulatory authority seeking to limit the Claims Procedure Order from impacting their
plainly financially material actions with artificial distinctions about "regulatory" orders and
"financial" ones. To an insolvent company in CCAA restructuring, an order to pay tens
of millions of dollars directly is no different from an order to spend an equivalent amount
on specific actions that will benefit others.
[172] Where, as here, the EPA Orders are moreover founded exclusively upon alleged
actions in the pas~ and relate in no way to activities taken after the commencement of
proceedings, the supervising CCAA court applying such broad definitions has the
jurisdiction to intervene.
[173] In the context of the EPA Orders and the Abitibi Act, the Province stands as the
direct beneficiary, from a monetary standpoint, of Abitibi's compliance with the EPA
Orders. In other words,. the execution in nature of the EPA Orders would result in a
definite credit to the Province's own "balance sheet". Abitibi's liability in that regard is an
asset for the Province itself.

000600

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PAGE: 31

[174] With all due respect, this is not regulatory in nature; it is rather purely financial in
reality. This is, in fc:1ct, closer to a debtor-creditor relationship than anything else.
[175] This is quite far from the situation of the detached regulator or public enforcer
issuing order for the public good. Here, the Province itself derives the direct pecuniary
benefit from the required compliance of Abitibi to the EPA Orders. The Province stands
to directly gain in the outcome. None of the cases submitted by the Province bear any
similarity to the fact pattern in the present proceedings.

[176] From this perspective, it is the hat of a creditor that best fits the Province, not that
of a disinterested regulator. Between the suggestion that the Province is merely
seeking compliancel with the EPA and the inference that it is rather looking to ascertain
a monetary value and financial benefit through the execution in nature of its EPA
Orders, the Court prefers the latter view based on the evidence as a whole.
[177] The fact that two of the five EPA Orders relate to property still owned by Abitibi
does not change this end result. lt is the global situation that must be considered here.
This is, in fact, how the Province approached the situation and still treats it today.
[178] In all likelihood, the pith and substance of the EPA Orders is an attempt by the
Province to lay the groundwork for monetary claims against Abitibi, to be used most
probably as an offset in connection with Abitibi's own NAFTA claims for compensation.
The evidence presented at the hearing indeed supports this assertion.
[179] During Mrs. Ballard testimony, the Province's Counsel filed in the record a
newspaper article of December 2009 reporting on an interview made with the Province's
Premier on the Abit~bi situation 31

[180] In that article, the Premier is quoted as saying that the Province is currently trying
to put a price tag on what it will cost to clean the environmental damage Abitibi allegedly
left behind at operations such as Grand-Falls, Botwood and Buchans.
[181] He is further quoted as stating that "if the assets do not exceed the liabilities,
there will be no cash payment coming from the government" and that "in our
assessment, at this point in time, there would not be a net payment to Abitibi".
[182] While the probative value of a newspaper article may generally appear weak at
first sight, the situation at hand is different. This exhibit was filed by the Province itself
and questions thereon were allowed without objection by anyone. Most importantly,
there were no attempts to deny the truthfulness of its content.
[183]

31

The Court c;annot ignore it in assessing the true nature of the EPA Orders.

Exhibit NL-16.

000601

500-11-036133-094

PAGE: 32

4) The Factual Context and the Content of the EPA Orders


[184] That is not a1ll. When considering the true intent and nature of the EPA Orders,
consideration of the broader context in which they have been issued and what their
content reveals are also relevant.
[185] In this regard, the evidence shows that the EPA Orders were, on the balance of
probabilities, most likely expected not to be complied with in nature by Abitibi, such that
their enforcement would only be achieved through monetary condemnations.
Accordingly, from the outset, the Province must have known that they were to be, in
reality, nothing else than a strategic bargaining tool for its negotiations with Abitibi.
[186] This being the case, they can hardly be qualified as true regulatory orders. This
rather supports thet finding that they were, to the contrary, financial and monetary in
nature, and intended to have this impact. Many factual elements justify this conclusion.
[187] First, in the months preceding the EPA Orders, the Abitibi Act was announced
and passed, less than two weeks after Abitibi made public the intended closure of its
Grand Fills mill operation.
[188] This lead to Abitibi filing a Notice of Intent to Submit a Claim to Arbitration under
Chapter 11 of NAIFTA for the losses arising from this confiscation effected by the
Province. As indicated earlier, according to Abitibi, the losses resulting from this
enactment are well in excess of $300 million.
[189] Not only was the Province fully aware of this, but it was known as well that if it
were to ever file a claim in the restructuring process, Abitibi would raise the value of its
cross-claims or set-off claims for this expropriation against the Province. While the
Abitibi Act denies Abitibi the right to use the Province's courts to that end, the Province
cannot, however, prevent Abitibi to raise this counter-claim argument in front of the
CCAA Court.
[190] As a result, it is a reasonable inference to draw that the Province had a definite
interest in trying to avoid any claims process in the CCAA, so as to shield itself from the
counter claim it knew Abitibi would surely oppose in compensation for the alleged
wrongful expropriation of the Abitibi Act.
[191] Interestingly,, in this case, the third party consultants (CRA) who issued the
reports that formed the basis of the EPA Orders were retained not by the Minister in the
exercise of her statutory duties, but by the Toronto litigation Counsel to the Province in
the NAIFTA proceedings. This is apparent from the face of each of the CRA Reports
filed by the Provinc1e, which are addressed not to the Minister but to these lawyers.
[192] Second, the EPA Orders issued on November 12, 2009, over six (6) months after
Abitibi filed for Cou11 protection under the CCAA, ordered Abitibi to perform the following
positive acts:

000602

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PAGE: 33

i)

tho submission for approval by January 15, 2010, of detailed


Re1mediation Action Plans for all sites identified by CRA as having
exceeded the allegedly applicable limits;

ii)

thE3 completion of the approved site remediation actions by January 15,


2011 or by another date as may be agreed upon with EVNC; and

iii)

the closure of all landfills and lagoons/impoundments associated with


each site by January 15, 2011.

[193] However, ba1sed on the evidence of Mrs. Minville, to submit detailed Remediation
Action Plans as requested would have rather required close to a full year to be carried
out adequately.
[194] Similarly, the closure of all landfills and lagoons or impoundments associated
with each site being logically the last task to perform when a remedial action plan is
implemented, requiring Abitibi to close these units no later than January 15, 2011 was
unrealistic.
[195] In addition, given the magnitude and scope of the work ordered by the Province
to be carried out simultaneously at the five locations targeted by the EPA Orders, based
on Abitibi's past e)(periences with such projects in NL, it is highly doubtful that there
existed sufficient resources (engineering firms, specialty providers such as drillers and
laboratories and authorized specialty contractors) to carry out the work within the
prescribed one-year time frame.
[196] All this suggests that the Province never truly intended for the EPA Orders to be
abided by or complied with in nature given the unrealistic time frame imposed.
[197] Third, at the time the EPA Orders were issued, the Province knew or should
have known that, iln any event, it would be impossible for Abitibi to comply with them.
There were a number of reasons for this.
[198] To begin with, since the approval of the ACI DIP Facility on May 6, 2009, Abitibi's
operations have been funded through debtor-in-possession facilities under the
supervision of the Monitor and Abitibi's creditors, including its secured lenders. Abitibi's
access to funds was therefore limited to funding for its ongoing business operations and
Abitibi enjoyed little discretion as to how these funds are allocated.
[199] Furthermore, even if Abitibi was in possession of the funds necessary to comply
with the EPA Orders, it would not be possible for it to comply with the EPA Orders in the
sequencing and timeframe imposed by these orders while seeking to manage the
complex task of raising financing and organizing its emergence from CCAA
proceedings.

000603

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PAGE: 34

[200] Finally, the EPA Orders targeted sites that were expropriated (Grand FallsWindsor, Buchans and the Logging camps) or surrendered to the Province long ago,,,
such that Abitibi could doubtfully access properties that were now in the possession of
third parties to complete the remediation efforts sought.
[201] The fact that Abitibi acknowledged in the East having on-going envi~onmental
obligations, like, for instance, for the Buchans site 2 , does not carry much we1ght when
the sites at issue are not in its ownership, possession or control anymore.
[202] In all fairness, a regulator can hardly pretend to realistically order that a "person
responsible" carry out actions upon properties that it no longer owns. This order would
be unenforceable for obvious reasons. In such situations, non-compliance can only be
compensated through monetary damages.
[203] One example will suffice. In view of the Abitibi Act, the Province is now the
owner of the Grand-Falls paper mill. As such, the expenses of safely demolishing the
mill and removing it normally belong to the Province as its new owner. In spite of this,
the EPA Orders purport to require Abitibi to prepare a plan for the demolition of the
Grand Falls mill that is now owned by and in possession of the Province.
[204] This order is as unenforceable as it is unjustifiable.
[205] When an order is most likely expected to be complied with through compensation
in money rather than enforcement in nature, the regulator cannot avoid the qualification
of the order as being a claim simply by refusing to wear the hat of a creditor for strategic
purposes and financial or economic advantages, instead of valid public policy reasons.
[206] Actually, on February 8, 2010, the Minister noted in her decisions rejecting
Abitibi's appeals of the EPA Orders that, in respect of each site, Abitibi had failed to
comply with the EPA Orders within the set deadlines.
[207] Over all, it appears obvious that the Province knew that Abitibi could not, would
not and will not be in a position to comply with its so-called injunctive or purely
regulatory orders.

'

[208] Fourth and last, the Province is the transferee of most of the lands in respect of
which the EPA Orders were issued. Yet, it has pointedly declined to make an order
against itself despite the fact that it would be the beneficiary (in terms of improved land
value) of any remediation work performed. The Province, as owner and occupier of the
nds, is clearly a "person responsible" under s. 99 of the EPA.

'j/ /o9]

In a similar fashion, the Provinc.e, in its role as regulator, never asked other

persons responsible under 1ts EPA, like the towns Involved, USAF, ASARCO or

32

Exhibits NL-8 to NL-11.

000604

PAGE: 35

500-11-036133-094

Linerboard, to deal with the environmental obligations allegedly outstanding on the


Abitibi Sites.

oth~r

th~

~h~

[21 0] In
words .
evidence suggests that.
target was not
statutory dutle~t,bl1gmJ.gns. The target was Ab1tlb1.

tht..:~~~nt of
.,,=---::::::-

[~~f'"mfhe;;~;~derations, it is reasonable to infer that the intended,


practical and realistic effect of the EPA Orders was to establish a basis for the Province
to recover amounts of money to be eventually used for the remediation of the properties
in question.

1r

(//
I
1

5) The Province's IBehavior prior and after the EPA Orders

[212] There is more. Be it before or after the EPA Orders, the Province acted as a
creditor with respect to the claims that they include.
[213] For instance, only days prior to issuing the allegedly non-monetary EPA Orders,
the Province was !before the Court in the Data Room Motion, arguing that it was a
creditor of Abitibi precisely because of, amongst others, various environmental claims it
allegedly possessed, including claims relating to Buchans, a site targeted by the orders.

[214] In the judgment on the Data Room Motion, the Court noted in fact that "the
Province claimed that because of Abitibi's economic activities, it has exposed itself to
numerous environmental obligations, the precise extent of which remains to be
determined" and that "the Province alleged that it has incurred significant costs in that
regard".
[215] Put another way, in its Data Room Motion, the Province alleged that it had
already incurred significant costs and liabilities as a result of a) Abitibi's alleged failure to
meet its obligations and b) its hiring of CRA environmental consultants.

[216] In a contradictory manner however, in the EPA Motion, the Province now alleges
that the very same monetary claims that it sought to advance as a basis to seek access
to the electronic data rooms of Abitibi are no longer monetary claims, and thus remain
unaffected by the stay of proceedings and the Claims Procedure Order.
[217] While the an~uments of the Province for access were denied for the reasons set
forth in the judgment on the Data Room Motion, the fact that such potential claims are
financial and monetary in nature remains plain and obvious.

[218] For the Province to now contend otherwise is not very convincing and seems
opportunistic at best. Admittedly, if the hat of the creditor (be it actual or potential) was
proper then, it certainly would fit as well now.
[219] In a similar vein, the evidence showed that the Province actually began the
process of seeking third party tenders for some of the remedial work that it was

000605

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PAGE: 36

allegedly expecting Abitibi to perform pursuant to the EPA Orders, the whole merely
days after issuing the orders and weeks before the compliance deadline had expired.
[220] Mrs. Ballard confirmed this. Requests for proposals concernin~ the remediation
work at the Buchans site were released as soon as in December 2009 3 .
[221] Mrs. Ballard explained as well that the Province did some emergency work to
repair the integrity of a dam near Buchans, and even dealt with some health issues
arising from potential lead exposures in that town .. Both issues were covered in the
CRA Reports that were the source of the EPA Orders.
[222] The ProvincE~ thus appears to have so far taken some steps to liquidate, at least
partially, the extent of its claims against Abitibi arising from the EPA Orders. This is
consistent with the true financial nature of these orders and the status of creditor of the
Province. The interview of December 2009 of its Premier is along the same lines34 .
[223] On the whole, not only have some alleged damages been liquidated and related
costs incurred, but it also seems that the Province has already a very good idea of the
total costs involved. Certainly precise enough for the Premier to say that in all
likelihood, no net payment to Abitibi will ensue.
[224] This is quite far from a behavior that would be consistent with a pure regulatory
order. lt is rather conduct analogous to those cases where courts have concluded that
it amounted to provable claims of regulatory bodies in bankruptcy processes35 .
(225) As matter of fact, these claims can easily be characterized as contingent. They
are far from being too remote or even too speculative. To the contrary, they bear strong
elements of probability and the Province has definite means of valuing them. lt has in
fact started the process, to such an extent that the Premier was able to affirm that there
were no expectations of any net payment to Abitibi as early as in December 200936
[226] Therefore, as things stand presently, the EPA Orders are more than likely to
result in a debt and liability of Abitibi towards the Province in the short term at worst.
[227] In such a c:ase, s. 12 of the CCAA authorizes the Court to determine the
"amount" of the claim that may be compromised. lt corresponds to the amount that
"proof of which might be made". The CCAA does not provide solely for the compromise
of filed or actual claims but has from its inception been correctly interpreted as
permitting contingent claims to be included. Here, there is definitely a claim that "might"

33
34

35

36

Exhibit NL-15.
Exhibit NL-16.
See, for instance, Re Shirley, (1995} 36 C.B.R. (3d) 101 (Ont. Ct. J.) and Re General Chemical
Canada Ltd., 2007' CarsweiiOnt 5497 (Ont. C.A.) ("General Chemicaf'), leave to appeal to the
Supreme Court refused.
Exhibit NL-16.

000606

500-11-036133-094

PAGE: 37

be filed. That objective fact, not the subjective choice of the creditor to hold the claim in
its pocket for tacticatl reasons, is the test under the CCAA.
[228] There may be difficulty in proving the amount or the right. Abitibi certainly
contests every element of them. However, these objections would not put such a claim
on a footing any different from other complex contingent claims that a claim officer or a
court is called upon to consider in the course of CCAA proceedings.
[229] The fact that a claim may not be ascertained and may in fact be contested in its
entirety during the CCAA process does not prevent it from being compromised. In
many situations, courts have been called upon to determine the value of contingent or
disputed claims for the purpose of having such claims included in compromises. The
provable values of such claims are determined based on an assessment of the
likelihood of the contingency occurring, followed by a quantification of the claim 37
[230] The same process may be adopted whether the claim is a complex litigation
claim, a claim undler human rights legislation, a claim under a guarantee not yet
demanded or a claim for environmental remediation under the EPA in respect of
formerly owned properties38 .
[231] If, under the CCAA, a debtor can compromise contested debts arising from pay
equity and tabor statndards statutes, class actions and personal injuries claims, or even
pension plans disputes, it can certainly compromise environmental claims that are
financial in nature c:md whose likely enforcement is through a monetary condemnation
as opposed to an execution in nature upon the debtor.
(232] There is no reason to make an exception in this case. In Anvil Mining Range
39
Corp. , Farley J. sanctioned a liquidation plan of arrangement under the CCAA in
respect of mines aJainst which certain government creditors held secured claims. One
of these was a $60 million claim by the Department of Indian Affairs and Northern
Development that included future environmental remediation costs. In a judgment
upheld by the Ontario Court of Appeal, Farley J. noted that the claim had been
acknowledged as "contingent since it relates to reclamation costs in the future".
[233] Contingent cllaims are nothing more than incomplete claims, the enforceability of
which depends on some contingency or future event that has not yet occurred (and may
never occur). In thE~ case of a guarantee, it might be the non-payment by the principal
debtor. In the case of an environmental claim of the sort advanced by the Province, it
would be the decision of the latter to carry out the remediation and pass along the cost
as the EPA provides.
37
38
39

See, Air Canada, Re, 2004 Canlll 6674 (Ont. S.C.), at para. 6; Air Canada, Re, 2006 Canlll 42583
{Ont. S.C.), at paras 24 and 25.
See, with respect to guarantee claims, Algoma Steel Corp. v. Royal Bank, 1992 CarsweiiOnt 162
(Ont. S.C.), at paras 12ff.
Anvil Range Mining Corp., Re, 2001 CarsweiiOnt 1325, at para. 15 (Ont. S.C.); aff'd. in Anvil Range
Mining Corp., Re, 2002 CarsweiiOnt 2254 (Ont. C.A.)

000607

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PAGE: 38

[234] The fact that all the elements of the claim do not presently exist does not deprive
a contingent claim of its essential element of being a claim that can be quantified and
the amount of which can be compromised.
[235] The holder of a guarantee that has not been called cannot seek to avoid the
compromise of his or her claim by saying "you cannot compromise the guarantee I hold
as 1 have not demanded on it yet". Likewise, neither can the Province allege that the
claims for the co~>ts of remediation of the properties which it has seized without
compensation cannot be compromised simply because it chose not to actually ask for
money in a situation where it is reasonable to conclude that this is the only way to go.
[236] Under such circumstances, a conditional creditor cannot have the luxury of
electing whether or not its claim is subject to compromise under the CCAA. That would
defeat its basic objectives and key purposes.
6) The EPA and the Applicable Case law

[237] In the present case, the EPA Orders were issued pursuant to s. 99 of the EPA,
which provides that: the Minister may make an order "requiring a person, at that person's
own expense" to do any of the listed category of actions.
[238] The jurisdiction to make such order is specifically couched in terms of the ability
to cause a person to incur an expense. From that standpoint, such an order is, by its
very nature, financial or monetary.
[239] Furthermore, s. 102(2) of the EPA permits the Minister to take action to carry out
the terms of the order if the person to whom it is directed fails to do so. lt provides that
the expenses incurred by the Minister in doing so "are recoverable by the minister from
the person to whom the order was directed as a debt owed to the Crown".
[240] Contrary to the situation that prevailed in some decisions invoked by the
Province40 , the EPA thus contains a "debt-creating provision" in the event that a person
targeted by an environmental remediation order fails to comply with it.
[241] As the EPA provides that the regulatory agency may perform the task itself and
assert a claim against the debtor in respect of the costs of the performance of the
obligations, the mechanism of a monetary judgment is then clearly contemplated as a
means of enforcing environmental compliance. This is explicitly the case in subsection
102(4) of the EPA.
[242] Even if step~:; had not been taken by the Province to perform the work itself (and
here, some have definitely been), this would signify nothing more than the difference
between an accrued claim and a contingent one. Indeed, on the facts of this case, a
money claim is the only mechanism for enforcement realistically open to the Province.
40

See, for instance, He Lamford Forest Products Ltd., (1991) 10 C.B.R. (3d) 137 (B.C.S.C) ("Lamford").

000608

PAGE: 39

500-11-036133-094

In such a context, it is difficult to sustain, as the Province argues, a demarcation


between enforcemc:lnt of the law and pursuit of a monetary judgment.
[243] There is little doubt that if the Province were to take the steps that clearly lie
within its power to take under the EPA (i.e. performing the allegedly necessary
remediation and making a claim for the costs so incurred), the resulting costs would be
monetary claims provable in bankruptcy.
(244] The only difference at the moment is that the Province maintains that the last
step in the process of quantifying its claims under the EPA Orders can be kept in its
pocket and mana~Jed at its discretion for the purpose of gaming the CCAA and the
priority of creditor claims hereunder.
[245] With respect, this is hardly a defensible position.
I

[246] To this day, although it is aware of the fact that Abitibi cannot comply with the
EPA Orders, the Province maintains that it has chosen to compel Abitibi to fulfill the
terms of the EPA Orders rather than resort to an exercise of its powers under s. 102 of
the EPA.
[247] The Province adopts this approach because it needs to argue, for strategic
purposes, that it i~~ not a "creditor" of Abitibi, a few weeks after arguing the opposite
position in the Datat Room Motion.
[248] For the Province, the definitions of claims and provable claims found in the
CCAA and in the BIA are dependent on the existence of a debt or liability owed by the
bankrupt or insolvent person to the person with the claim. This was, it argues, the
conclusion reached in Jameson House Properties Ltd. (Rel 1 , where the British
Columbia Court of Appeal said that a claim for CCAA purposes must consist of "a debt
or liability . . . that must be owed by the [debtor] to the person seeking to prove the
claim ... "
[249] The Province's argument rests primarily on the distinction made in the
Panamericana 42 case between a situation "where the government insists that the
person fulfill his or her statutory duties or obligations from his own resources" and one
where the government avails itself from the debt-creating provision in its environmental
legislation to perform the remedial work. Only in the latter situation would the
government create a "debt owed to the Crown" and could not be anything else than a
creditor.
[250] In Panamericana, the Court held that an environmental order imposed by the
Alberta Energy Resources Conservation Board on a receiver of a bankrupt company
was not a "claim provable". If the liability of the receiver for the abandonment of oil
41
42

(2009) 11 W .W .R. 425, at para. 47 (B.C.C.A.).

Panamericana de Biennes Y Servicios (Receiver of) v. Northern Badger Oil & Gas Ltd., (1991)
81 D.L.R. (4th) 280 (Aita C.A.) ("Panamericana"), leave to appeal to the Supreme Court refused.

000609

500-11-036133-094

PAGE: 40

wells was present, that liability was not owed, however, to a "creditor". lt was rather

owed to the public at large:


The statutory provisions requiring the abandonment of oil and gas wells are part
of the general law of Alberta, binding every citizen of the province. All who
become licensees of oil and gas wells are bound by them. Similar statutory
obligations bind citizens in many other areas of modern life. Rules relating to
health, or the prevention of fires, or the clearing of ice and snow, or the
demolition of unsafe structures are examples which come to mind. But the
obligation of the citizen is not to the peace officer. or public authority which
enforces the law. The duty is owed as a public duty by all the citizens of the
community to their fellow citizens. When the citizen subject to the order
complies. the result is not the recovery of money. nor is that the object of the
whole process. Rather it is simply the enforcement of the general law. The
enforcing authority does not become a "creditor" of the citizen on whom the duty
is imposed. (p. 290)
(Our emphasis)

[251] Likewise, in the two cases indexed as Strathcona (Country) v. Fantasy


Construction Ltd. (Trustee of)43 , the Alberta Court of Queen's Bench ruled that an
insolvent debtor must comply with its regulatory obligations to the public before paying
the creditors. Relying on Panamericana, it stated that an obligation of the bankrupt to
comply with public safety or environmental standards based on statutory authority must
be honoured by thH Trustee using estate assets notwithstanding resulting prejudice to
creditors of the bankrupt.
[252) The court he~ld, however, that where the regulatory authority has chosen to make
itself a creditor by monetizing the regulatory obligation, the authority's status changes
from that of an "enforcer" outside the scheme of bankruptcy distribution to a "creditor"
within it:
Clearly, it is essential to this reasoning that the public agency charged with
enforcing the general law of Alberta not have taken steps to make itself a
creditor. If it has exercised a statutory authority or authority obtained from some
other source, such as a Court Order, to do whatever ought to have been done by
the party with the obligation and to recover the costs of doing so, it has become a
creditor. From then on, the object of the whole process has changed. The public
agency is no longer seeking to require the party with the general law obligation to
comply. lt is seeking to recover money. If the party with the obligation is in
bankruptcy, collection of the money, its debt, by the public authority must be
subject to the scheme of distribution created by the BIA44
(Our emphasis)

43
44

2005) 261 D.L.R. (4th) 221 (Aita Q.B.) and (2005) 256 D.L.R. (4th) 536 (Aita Q.B.) ("Strathcona").
(2005) 261 D.L.R. (4th) 221 (Aita Q.B.), at para. 46.

000610

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[253] In a similar fashion, pleads the Province, the Ontario Court of Appeal decided in
Bulora, thirty years ago, that a court-appointed receiver-manager was required to
expend money under its control - money that would otherwise be paid to secured
45
creditors - in order to comply with regulatory obligations
[254] The Court considers that the Panamericana, Strathcona and Bulora decisions
are distinguishable from the present situation based on the relevant facts.
[255] Pivotal in these decisions was the fact that the regulators involved were not
acting as creditors, nor seeking the recovery of a debt. They were rather public
agencies seeking to enforce the general law of the province involved. None was
deriving a direct pecuniary benefit through the compliance of the orders issued. That no
steps had been tak,en (i) to enforce the law at issue, (ii) to make the regulator involved a
creditor or (iii) to SE~ek the recovery of money were also key to the findings adopted by
the courts.
[256] On top of that, in each of Panamericana, Strathcona and Bu/ora (and in Lamford
too}, the debtors were still the owner of the assets covered by the orders to be complied
with.
[257] The present situation is unique. lt bears no similarity with the facts in any of
these decisions. In none of them did the regulator stand to directly benefit financially
from the orders is~;ued. Here, to borrow from the wording used in these cases, the
Province has even taken steps to make itself a creditor. Indeed, it can reasonably be
inferred from the fact pattern at issue that it is, in truth, seeking to recover a benefit for
itself, if not simply money.
[258] Given the lack of any presence of Abitibi in the Province and the obvious
adequacy of money as a remedy to its alleged claims, the only effective means by
which the EPA Orders can, on the balance of probabilities, be effectively enforced is by
invoking s. 102(3) and (4) of the EPA now or later.
[259] Put otherwise, looking at the true substance over the apparent form, it is not the
public "enforcer" taking steps to enforce the general law. lt is, to the contrary, the
enforcing authority clothed as a creditor.
[260] From that perspective, the situation at hand bears a lot of similarities to Re
Shirley4 6 . In that case, the regulating authority was found to have a provable claim for
costs expended and to be expended following a clean-up order ignored by the debtor
but upon which the Ontario Minister of Environment had had to begin work partially.

45

46

Canada Trust Co. v. Bulora Corp. (1980) 34 C.B.R. (N.S.) 152 (Ont. C.A.) ("Bulora"), affirming (1980)
34 C.B.R. (N.S.) 145 (Ont. S.C.); see also, along the same lines, Re Lamford Forest Products Ltd.,
(1991) 10 C.B.R. (3d) 137 (B.C.S.C) ("Lamforcf').
(1995) 36 C.B.R. (3d) 101 (Ont. Ct. J.).

000611

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PAGE: 42

(261] If, like there, the Province can, and no doubt will, "create" a debt next month
based on the same jurisdictional cloth as now exists, that future obligation based on
presently existing facts is as subject to compromise as the debt "created" today.
[262] In other words, as this review of the case law indicates, only limited cases in
limited circumstances47 have so far ruled that non-monetary statutory obligations are not
claims provable in a bankruptcy process or in a CCAA restructuring. The cases actually
contain strong caveats48 to this kind of rulings where the duty is based on a statute that
includes a "debt-creating" provision and where the regulator has taken steps to engage
in the process by which such debt is created.
[263] Both conditions required for this exception to apply are present here, in a context
where it is, furthemnore, highly likely that the Province will have no other alternative but
to pursue the monetary claim process of its EPA under the circumstances.
(264] Besides, tho core of the Panamericana argument is that the receiver, having
elected to operatE~ the business, could not shirk its duty to follow a regulatory
requirement arisin~J from that very operation under general law. This narrow view,
which is the ratio of the case, was relatively uncontroversial (although subsequent
amendments to thE~ BIA and to the CCAA have effectively overruled it by placing limits
on a receiver's oblil~ations }.
(265] By contrast, Abitibi has not carried on business in NL since the time of filing and
the EPA Orders were issued primarily in respect of properties formerly owned by Abitibi
and in regard to activities in most cases years in the past.
[266] As a result, viewed as a case that found liability of a court-appointed receiver,
Panamericana is of little relevance following the amendments to the BIA and CCAA that
limited this liability ~explicitly. However, in its analysis, the Alberta Court of Appeal went
beyond a consideration of the receiver's responsibility as an operator of the business to
consider what claims may or may not be provable in bankruptcy. Such analysis was,
arguably, an obiter, most CCAA courts have not followed it in subsequent decisions.
[267] In that regard, the Court notes that the Panamericana decision did not consider
that the BIA (like the CCAA) explicitly contemplates the proof of contingent and
unliquidated claims which, combined with the "debt creating" provisions of a statute like
47

48

See, Panamerican.a de Biennes Y Servicios (Receiver of) v. Northern Badger Oil & Gas Ltd, {1991)
81 D.L.R. (4th) 280 (Aita C.A.) ("Panamericana"), leave to appeal to the Supreme Court refused;
Strathcona (Country) v. Fantasy Construction Ltd. (Trustee of), (2005) 261 D.L.R. (4th) 221 (Alta
Q.B.) and (2005) 256 D.L.R. (4th) 536 (Aita Q.B.) ("Strathcona"); Canada Trust Co. v. Bulora Corp.
(1980) 34 C.B.R. (N.S.) 152 (Ont. C.A.) ("Bulora"), affirming (1980) 34 C.B. R. (N.S.) 145 (Ont. S.C.);
and Re Lamford Forest Products Ltd., (1991) 10 C.B.R. (3d) 137 (B.C.S.C) ("Lamford'').
See, Re Shirley, (1995) 36 C.B.R. (3d) 101 (Ont. Ct. J.); Strathcona (Country) v. Fantasy
Construction Ltd. (Trustee of), (2005) 261 D.L.R. (4th) 221 (Aita Q.B.) and (2005) 256 D.L.R. (4th)
536 (Aita Q.B.) ("Strathcona"); and Re Lamford Forest Products Ltd., (1991) 10 C.B.R. (3d) 137
{B.C.S.C) ("Lamford").

000612

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PAGE: 43

the EPA, definitely allows for the Province to be qualified as a contingent creditor with
an eminently provable claim.
[268] In addition, in General Chemicaf9 , the Ontario Court of Appeal recently declined
to follow the Panamericana decision precisely because of the amendments to the B/A
and the CCAA that were subsequent to it:
"[45]
In this court, the MOE repeats its arguments below and raises, as it did
there, the case of Panamericana De Bienes Y Servicios (Receiver of) v. Northern
Badger Oil and Gas Ltd. 1991 Canlll2698 (AB C.A.}, (1991), 81 D.L.R. (4th} 280
(Aita. C.A.). ~n that case. the court found that provincial environmental legislation
concerning oillwell clean up costs did not conflict with the scheme of distribution
under the BIA. and had to be complied with even though that reduced the
amounts otherwise available for distribution in the bankruptcy.
[46]
I agre~~ with the motion judge that the reasoning in that case has been
overtaken because of subsequent amendments to the BIA. Section 14.06(7)
now expressly provides for priority to be accorded to environmental clean up
costs and s.. 14.06(8) now ensures that a claim against the debtor for
environmental clean up costs is a provable claim. Neither were in effect at the
time of Panamericana. To give effect to provincial environmental legislation in
the face of th1~se amendments to the BIA would impermissibly affect the scheme
of priorities in the federal legislation."
(Our emphasis)

[269] In that judgment, the Ontario Court of Appeal expressly approved of the motion
judge's finding that "[ ...] to permit the MOE to effect a dela~ in distribution would be to
give a quasi-priority over other unsecured creditors [ ... ]"5 . The premise of the first
instance judge's r~easoning was that federal legislation is paramount and that a
provincial law may not seek to reorder the scheme of distribution set out in the BIA.
[270] lt is worth mentioning that, similarly, the constitutional validity of the CCAA as a
51
whole is well established Relying on the paramountcy doctrine, often have the CCAA
courts emphasized that the operation of the CCAA regime cannot be thwarted by the
operation of provinc:ial legislation 52 .
[271] In sum, on a proper reading of its terms or their reasoning, neither the EPA nor
the applicable case law are of any help to the Province in the fact pattern at issue.

49

50
51

52

General Chemical Canada Ltd., Re, (2007) 35 C.B.R. (5th) 163 (Ont. C.A.) ("General Chemicaf'),
leave to appeal to the Supreme Court refused.
General Chemical Canada Ltd., Re, (2006) 22 C.B.R. (5th) 298 (Ont. S.C.J.), at para. 37.
Re Companies' Creditors Arrangement Act, [1934] S.C.R. 659.
ee, ATB Financial v. Metcalfe & Mansfield Alternative Investments /1 Corp., (2008) 92 O.R. (3d) 513,
at paras 102 to 104 (Ont. C.A.); Nortel Networks Corp., Re [Union and Employee Benefit Appeal],
1
(2009) 59 C.B.R. {!5 h) 23, at paras 38, 44 and 47 (Ont. C.A.); Skeena Cellulose Inc., Re, (2003) 43
C.B.R. (4th) 187, at paras 42 and 50 (B.C.C.A.).

000613

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PAGE: 44

7) The Province's Position

[272] All things considered, the Province's position amounts to an assertion that (i) the
financial consequences of regulatory orders, however material, cannot be affected by
the CCAA in any way, whether the obligations relate to past, present or future actions
by a debtor; (ii) the regulatory authority alone gets to decide what is a regulatory order
without court intervention; and (iii) generally "immune" regulatory orders can be
converted into potentially "compromisable" monetary orders at the whim of the
provincial regulator without court oversight or review.

[273] This contention boils down to claiming that a provincial regulator could have the
non reviewable right to determine whether obligations it controls or creates will be
subject to compromise under the CCM or whether they will enjoy a super-priority
beyond the reach of compromise.

[274] The Court disagrees with such a proposition.


[275] The Province's attempt at fashioning a super-priority for the satisfaction of its
environmental claims by crafting the EPA Orders and "managing" the timing of the
creation of the "Crown debt" under s. 102 of the EPA is not only contrary to the
principles of the CCM. lt is also unjust vis-a-vis Abitibi's other creditors whose claims
are effectively stayE~d and will be compromised.

[276] When parag1raph 10.1 of the First Stay Extension Order was added, the intent
was not to grant super-priority status to regulatory bodies for pre-filing claims. Rather,
this amendment simply permitted regulatory bodies to continue to regulate Abitibi in
respect of its conduct after the commencement of the CCAA proceedings. From that
perspective, this amendment was adhering to the spirit of s. 11.1 of the amended
CCAA.
[277] This limited amendment to the stay provisions of the Initial Order recognized that
a government is not prevented from issuing regulatory orders in good faith in relation to
ongoing health, safety, security, public order or environmental concerns. Abitibi is
required to address these since it must abide by government regulations in relation to its
ongoing business operations while under CCAA protection.
[278] Such concerns are distinguished, however, from past environmental liabilities of
a monetary nature relating to assets that are, for the most part, no longer under Abitibi's
control.

[279] With respect, the Province's proposition would, moreover, render meaningless
significant amendments made by Parliament to the CCAA and the BIA in 1992, 1997
and 2009 so as to strike some balance between bankruptcy and insolvency laws and

environmental obligations.

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PAGE: 45

[280] These amendments notably incorporated s. 11.8 in the CCAA in 1997. Pursuant
to that section, remediation costs for environmental damage enjoy a special status. The
Crown benefits from a first rank priority on the contaminated property or contiguous
property of a debtor for the costs of remedying any environmental condition or damage
provided, of course, the debtor still owns it (s. 11.8(8)). These clean-up costs are also
acknowledged as cllaims under the Act (s. 11.8 (9)).
[281] The lien is attached to the contaminated property and other contiguous real
property of the debtor that is related to the activity that caused the contamination.
Nonetheless, the liEm does not give the Crown any priority over the rest of the creditors
on the other assets of the debtor. In that regard, the Crown remains an ordinary
unsecured credito,-6 3 .
[282] The Provinc13 claims that this s. 11.8 priority exists only if the Crown has incurred
the costs. lt is therefore not applicable here.
[283] In contrast, for Abitibi, statutory liabilities to remedy environmental damage
should be provable claims under the CCAA, whether or not the Crown has effectively
incurred the costs. For it to be a priority claim under s. 11.8, it should be sufficient that
the likelihood of enforcing the remediation by incurring the cost be greater than the
likelihood of enforcing it by an execution in nature against the debtor.
[284] In that context, claims eligible to the priority of s. 11.8 would also be subject to
any compromise to be reached under the CCAA.
[285] It is not necessary to decide this issue here in view of the Court's finding that the
EPA Orders are financial in nature and thus, qualify as claims under the CCAA no
matter what.
[286] In any event, in this case, one reality remains. By expropriating Abitibi, the
Province effectively "realized" on any security to which it would have otherwise been
potentially entitled under s. 11.8(8} of the CCAA should the expropriated lands be
contaminated. Nev~ertheless, by its position, it still seeks to go further and indirectly take
for its benefit other property and assets of Abitibi located beyond its borders.
[287] In the Court's opinion, this should not be allowed outside the limited framework of
the CCAA restructuring process.
[288] All in all, this position adopted by the Province not only 'fails to take into account
the true impact of these relevant amendments to the law, it also runs counter to the
spirit of the CCAA and the well-established principle of compromise of contingent
claims.
53

General Chemical Canada Ltd., Re, (2006) 22 C.B.R. (51h) 298 (Ont. S.C.J.); aff'd. in General
Chemical Canada Ltd., Re, (2007) 35 C.B.R. (51h) 163 (Ont. C.A.) ("General Chemicaf'), at para. 42,
leave to appeal to the Supreme Court refused.

000615

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PAGE: 46

[289] The Province's position rests on the premise that obligations or duties to comply
with the general law are not "claims" but rather "obligations" that cannot be
"extinguished" upon a debtor's insolvency.
[290] lt shall be noted that, contrary to what the Province often said, claims cannot
properly be qualitiled as "extinguished" upon insolvency. They are rather called for,
determined and ultimately compromised under a plan of arrangement, only after the
latter has been votHd upon by the creditors and approved by the Court.
[291] In the Court's view, monetary claims disguised as regulatory orders issued in
relation to pre-filing activities on lands which are no longer in control of a debtor should
not, in a situation where the costs of the remediation efforts are reducible to money, be
permitted to remain uncompromised and in existence post-emergence where to do so
could threaten the presentation of a viable compromise or plan of arrangement.
[292] In line with its rehabilitative objectives, the CCAA does not contain a provision
analogous to section 178 of the BIA whereby certain "excepted claims" (such as fines or
penalties) could constitute debts that survive bankruptcy (or in the CCAA's case,
emergence). In Air Canada 54 , Cummings J. qualified excepted claims as "exceptions to
the normative policy objective of rehabilitation" and concluded that they did not apply to
proceedings under the CCAA.
[293] If the Court were to accept the Province's position, the remediation obligations
would become, in effect, priorities or unaffected obligations to be satisfied in full by
Abitibi before the rE~maining value of its enterprise is allocated among the other creditors
and claimants. ThE~ net effect of such a determination would be the reallocation of value
away from the cnaditors generally in favour of the Province and the size of such
reallocation would be material.
[294] Environmental liabilities of this magnitude would also, if uncompromised upon
emergence from the CCAA process, act as a sword of Damocles over Abitibi by
threatening its continuity post-emergence. In fact, this mere threat could very well
preclude obtaining needed exit financing and prevent a plan from being adopted, unless
a potentially risky and costly strategy of devising a liquidation plan were employed. This
would defeat the vE~ry objectives of the restructuring process.
[295] If that were to be the case, the net result would be that the ability of Abitibi to
successfully restructure would be challenged on a number of levels. At the very least,
the restructuring process would likely become more complicated, including further
delays and costs.
[296] The Court considers that this is definitely not the preferred way to go.

54

Air Canada, Re, 2006 Canlll 42583 (Ont. S.C.), at paras 34ff.

000616

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PAGE: 47

FINAL REMARKS

[297] In closing, as the CCAA judge presiding over this restructuring, the Court
believes that some 'final remarks are warranted.
[298] For all stakeholders involved, the restructuring of Abitibi is by no means an easy
task. The extent of the indebtedness is huge. lt is in the range of many billions of
dollars.
[299] Term lenders, secured noteholders and bondholders each have concerns. The
same goes for numerous trade creditors. Thousands of employees and pensioners
may be affected. Dozens of facilities are at stake. Tens of communities are looking
forward to a positive outcome. Pension plans, collective agreements and commercial
contracts of all sorts must be looked at and, in many cases, reviewed and reconsidered.
[300] To date, the Court record indeed shows that more than 480 entries have been
recorded in less than a one-year span. During that period, the Court has rendered in
excess of 55 different orders on various issues.
[301] The hard reality of real time litigation in CCAA restructurings is that parties do not
have the luxury of debating forever their disagreements. This is simply not possible
when the debtor is fighting for survival. The preferred route to follow remains, at least in
the Court's view, to try to find an acceptable forum where each side is able to fully
present their positi01n, and get it ruled upon.
[302] No doubt harsh feelings exist between the Province and Abitibi as a result of the
events of certainly the last eighteen months, perhaps even more. So far, it has led them
to many battlefields, be it in the NAFTA proceedings, in the Data Room Motion or in the
present EPA Motion. All that without taking into account the many discussions that
these must have unquestionably provoked.
[303] Both believe, no doubt honestly, that they have legitimate claims to raise one
against the other. That may well be. However, they should be careful and, in truth,
attentive so that their disagreements do not end up causing much more serious
difficulties to many others. Unfortunately, it is clear that their disputes have this very
potential.
[304] lt is this Court's hope that they will find a way to agree on an appropriate forum in
which to arbitrate their differences, ideally sooner rather than later. Delays in this
respect do not serve the best interests of either of them. In the global picture, this has
moreover the potential of being far more detrimental to a number of other bystanders to
their disputes.
[305] To some extent, this judgment forces the Province and Abitibi to at least consider
bringing some of their claims within the realm of this restructuring, and not leave them

000617

PAGE: 48

500-11-036133-094

outside with the very negative consequences this may potentially bring upon the whole
process.
[306] The Monitor plainly voiced it. This restructuring may be put in jeopardy if no
solution is found along these lines. If that were to be the end result, the whole purpose
of the CCAA would have been ignored and set aside. With all the efforts deployed so
far by so many, tha1t would be most unfortunate.
FOR THESE REASONS, THE COURT:
[307] DISMISSES the Amended Motion for a Declaration Regarding Orders Issued
Pursuant to the Environmental Protection Act of the Petitioner, Her Majesty the Queen
in Right of the Proviince of Newfoundland and Labrador (the "Province");
[308] DISMISSES the Intervention of the Intervening Parties, Her Majesty the Queen in
right of the Province of British Columbia (the "HMQBC") and the Attorney General for
British Columbia (the "AGBC");
[309] DECLARES that the orders issued against the Debtors by the Minister of
Environment and Conservation of the Province on November 12, 2009, pursuant to s.
99 of the Environmental Protection Act, S.N.L. 2002, chap. E-141>2, (the "EPA
Orders"), are stayE~d under paragraph 10 of the Initial Order issued by the Court on

~~~~ g~d;~o9,
___,.__,.__

ancl are no:_subject

I
i

t~th:_~u~L~!"~.2.~~.~~. 2.~~~. . ,~!. ~"h~ ~ -~

J.....:::::::_,

[31 0] DECLARES that the Province's filing of any claim based on the EPA Orders is
subject to the Claims Procedure Order issued by the Court on August 26, 2009,
including the claims process detailed therein;

----------------

I
1

'""""""""'"""'ffl.'"''""-""'W."""'"""'""M'%'>>"~"""";;,

[311] RESERVES to the Province its right~if"any, to request an extension of the Claims
Bar Date (as definetd in the Claims Procedure Order) in that regard and to the Debtors
their right, if any, to contest any such extension request;
[312] WITH COSTS against the Province in favor of the Debtors, but WITHOUT
COSTS against the HMQBC and the AGBC.

Mr. Sean Dunphy and Mr. Joseph Reynaud


STIKEMAN, ELLIOTT
Attorneys for the De~btors
Mr. David R. Wingfie~ld, Mr. Robert D. Warren, Mrs. Catherine Powell and Mr. Paul D. Guy
WEIRFOULDS LLP
Attorneys for the Petitioner

000618

PAGE: 49

500-11-036133-094

Me Gilles Paquin
FLANZ FISHMAN MELAND PAQUIN
Attorneys for the Monitor
Mr. Robert E. Thornton and Mrs. Rachelle F. Moncur
THORNTON GROUT FINNIGAN
Attorneys for the Monitor
Mr. Richard Butler
Ministry of Attorney General of British Columbia
Attorneys for Her Majesty the Queen in Right of the Province of British Columbia and
the Attorney General of British Colombia
Me Jean-Yves Simard
LAVERY, DE BILLY
Attorneys for the Ad hoc Committee of Bondholders
Me Alain Riendeau
FASKEN MARTINEAU Du MOULIN
Attorneys for Silver Oak Capital LLC et al., DDJ Capital Management, LLC et al.
Me Marc Duchesnet
BORDEN, LADNER, GERVAIS
Attorneys for the Ad hoc Committee of the Senior Secured Noteholders and U.S. Bank
National Association, Indenture Trustee for the Senior Secured Noteholders
Dates of hearing:

February 24, 25 and 26, 2010

000619

PAGE: 50

500-11-036133-094

SCHEDULE "A"
ABITIBI PETITIONERS

1.

ABITIBI-C:ONSOLIDATED INC.

2.

ABITIBI-C:ONSOLIDATED COMPANY OF CANADA

3.

3224112 NOVA SCOTIA LIMITED

4.

MARKETING DONOHUE INC.

5.

ABITIBI-CONSOLIDATED CANADIAN OFFICE PRODUCTS HOLDINGS INC.

6.

3834328 CANADA INC.

7.

6169678 CANADA INC.

8.

4042140 CANADA INC.

9.

DONOHUE RECYCLING INC.

10.

1508756 ONTARIO INC.

11.

3217925 NOVA SCOTIA COMPANY

12.

LA TUQUE FOREST PRODUCTS INC.

13.

ABITIBIC::ONSOLIDATED NOVA SCOTIA INCORPORATED

14.

SAGUENAY FOREST PRODUCTS INC.

15.

TERRA I'IOVA EXPLORATIONS LTD.

16.

THE JONIQUIERE PULP COMPANY

17.

THE INTI:RNATIONAL BRIDGE AND TERMINAL COMPANY

18.

SCRAMEILE MINING LTO.

19.

9150338,3 QUEBEC INC.

20.

ABITIBI-CONSOLIDATED (U.K.) INC.

000620

PAGE: 51

500-11-036133-094
SCHEDULE "B"
BOWATER PETITIONERS

1.

BOWATER CANADIAN HOLDINGS INC.

2.

BOWATEIR CANADA FINANCE CORPORATION

3.

BOWATEIR CANADIAN LIMITED

4.

3231378 NOVA SCOTIA COMPANY

5.

ABITIBIBOWATER CANADA INC.

6.

BOWATER CANADA TREASURY CORPORATION

7.

BOWATER CANADIAN FOREST PRODUCTS INC.

8.

BOWATER SHELBURNE CORPORATION

9.

BOWATEIR LAHAVE CORPORATION

10.

ST-MAURICE RIVER DRIVE COMPANY LIMITED

11.

BOWATEIR TREATED WOOD INC.

12.

CANEXEL. HARDBOARD INC.

13.

9068-9050 QUEBEC INC.

14.

ALLIANCIE FOREST PRODUCTS (2001) INC.

15.

BOWATEIR BELLEDUNE SAWMILL INC.

16.

BOWATEIR MARITIMES INC.

17.

BOWATEIR MITIS INC.

18.

BOWATEIR GUERETTE INC.

19.

BOWATEIR COUTURIER INC.

000621

PAGE: 52

500-11-036133-094

SCHEDULE "C"
18.6 CCAA PETITIONERS
1.

ABITIBIBOWATER INC.

2.

ABITIBIBOWATER US HOLDING 1 CORP.

3.

BOWATER VENTURES INC.

4.

BOWATER INCORPORATED

5.

BOWATER NUWAY INC.

6.

BOWATER NUWAY MID-STATES INC.

7.

CATAWB.A PROPERTY HOLDINGS LLC

8.

BOWATER FINANCE COMPANY INC.

9.

BOWATER SOUTH AMERICAN HOLDINGS INCORPORATED

10.

BOWATER AMERICA INC.

11.

LAKE SUPERIOR FOREST PRODUCTS INC.

12.

BOWATER NEWSPRINT SOUTH LLC

13.

BOWATER NEWSPRINT SOUTH OPERATIONS LLC

14.

BOWATER FINANCE 11, LLC

15.

BOWATER ALABAMA LLC

16.

COOSA !PINES GOLF CLUB HOLDINGS LLC

000622

DEC-09-2009 12:50

Pn\lid J. P"teron
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tlu~te.patcnmn(t<lubitlllibov..;:~t<eu:om

December 9, 2009

Mr. Edmund J. Martin


President and Chief Executive Officer
Nalcor Energy
Hydro Place
500 Columbus Drive
St. John's, NL A1 B OC9
Mr. Louis U~vesque
Deputy Minister of International Trade
Deputy Minister's Office
125 Sussex Drive - Tower A
Ottawa, ON K1A OG2
By Fax and by Mail: 709-737-1782; 613~944"8493

Gentlemen:
Thank you for meeting with me yesterday. tt was important that we had the
chance to discuss the challenges that confront us. In particular our private
session 1ollowing lunch was helpful to me.
After reflecting on yesterday's meeting, t wanted to share with you my sense
of our situation. First, it is clear that Abitibl3owater and the Province of
Newfoundland and Labrador will be unable to reach agreement. Secondly, I
now believe that there will be insufficient net cash available to satisfy our
creditors.
I have instructed my team to work closely with your representatives to try and

resolve the environmental issues as we all committed to do yesterday. At the


same time, I am asking our legal team to update the Notice of Arbitration for
Imminent filing given the pressure from our creditors. lt will refocus the issue
as a legal matter between AbitibiBowater and the Canadian Federal
Government.
We should stiH have our meeting on Decembet 21st in St. John's. However, I
want to be clear that I feel that the chance of a settlement is very low.
Sincerely,

~
OJP/sc

RECEIVED TIME DEC. 9.

1:21PM

000623

Gilbert, Anne
From:
Sent:
To:
Subject:

Ronholm, Kim [Kim.Ronholm@NRCan-RNCan.gc.ca]


June 25, 2009 4:37 PM
Gilbert, Anne
FW: AbitibiBowater/Newfoundland Discussion

Importance:

High

Hi Anne,
Thought this might be of interest to you ...
Kim
Kim Ronholm
Senior Policy Advisor I Conseiller principal en poltiques Science and Policy Integration I
Integration des sciences et des politiques kronholmnrcan.gc.ca
Phone: 613-995-3629
Fax: 613-947-5977
Natural Resources Canada, 580 Booth Street, Ottawa, Ontario K1A OE4 Ressources naturelles
Canada, 580 rue Booth, Ottawa (Ontario) K1A OE4 Government of Canada I Gouvernement du
Canada

-----Original Message----From: Ready Robert (DFAIT.MAECI)


Sent: June 25, 2009 14:39
To: Beyea Dean (FIN); Morber, Edith; Lorimer Audrey (ACOA.APECA); Wilkie Christopher
(PCO.BCP); cburlock@edc.ca; Tabet Sylvie T (DFAIT.MAECI)
Cc: Bernier Cynthia (DFAIT.MAECI); Lapierre-Houssian, Raphaelle -TBI; Caron Natalie
(DFAIT.MAECI); Murdock Bruce (DFAIT.MAECI); Stephenson Don (DFAIT.MAECI); Carry Jillian H
(DFAIT .MAECI)
Subject: AbitibiBowateriNewfoundland Discussion
Importance: High
I would like to invite you to a meeting to discuss the current situation between
AbitibiBowater Inc.and Newfoundland and Labrador following action by the province to take
over the assets of the company. This action has resulted in the company filing a Notice
of Intent to pursue NAFTA Chapter 11 arbitration.
DFAIT has been asked to pursue discussions related to this matter and we would like to
hold a brief meeting to:
i) inform you of our plans, and
ii) seek information as to your organization's engagement with AbitibiBowater.
The meeting will be help on Monday, June 29 at 1300 hours, 111 Sussex Drive, Room S7-100.
Please confirm your attendance with Jillian Carry (944-4338) of my office and we will
forward your names to our front desk.
Robert Ready
Chief Air Negotiator I Negociateur en chef des accords aer1ens Foreign Affairs &
International Trade Canada I Affaires etrangeres et Commerce international Canada 111
Sussex Drive, 8th floor, Sussex Pavillion I 111, promenade Sussex. 8ieme etage, Pavillon
Sussex Ottawa, Ontario, Canada, K1N 1J1 Tel. + 613 944-1116 Fax. + 613 944-0023 Mobile +
613 862-2858 E-mail I courriel: robert.readyinternational.gc.ca

000624

ABITIBIBOWATER
BACKGROUND
AbitibiBowater, headquartered in Montreal and incorporated in Delaware. Abitibi Inc. and Bowater Inc.
merged in 2007 to become AbitibiBowater. The company owns or operates 22 pulp and paper facilities and
27 wood products facilities located in the U.S., Canada and South Korea.(AbitibiBowater Press release
Feb.2010) It is also amongst the world's largest recyclers of newspapers and magazines and has third party
certification of all of its managed forest lands.
Similar to other forest industry companies, AbitibiBowater faced a number of challenges including the
cyclical nature of the forest products industry; collapsing demand for newsprint in North America, its
principal product; weak paper markets; capital-intensive nature of its operations; weakened global economy;
and cost pressures resulting from the volatility of currency exchange rates and costs for fibre and energy.
AbitibiBowater took steps to address theses issues by curtailing its production, such as permanent closures,or.
indefinite idling, divesting non-core assets and implementing cost reductions.
However, it was unable to address debt maturities and liquidity needs. Hence, AbitibiBowater and its
subsidiaries filed for court protection in the U.S. and in Canada under CCAA on Aprill6, 2009. Today, the
company continues operations under bankruptcy protection.

Other issues:

Pension plans: Pension plans are unfunded by $1.3 billion. To spare more than 17,000 Canadian
retirees from losing about a quarter of their pensions, th~ union has proposed a plan to shift the money
backing retirees pensions to a separate trust fund. According to news sources, the Company has reached
two tentative deals with unions: one with Communications, Energy and Paperworkers Union of Canada
(CEP) (on March 7, 2010) affecting about 4,500 workers at 12 mills in Eastern Canada (and about 8,000
retirees), the other with the Quebec Federation of Labour (March 13, 2010) which will affect about 1,000
workers at 4 mills in Quebec.

Newfoundland and Labrador:


Feb.25, 2010: AbitibiBowater filed a Notice of Arbitration under NAFTA with regards to the
expropriation of its assets and rights by the government of Newfoundland and Labrador, on
February 25, 2010, claiming CDN$500 million in damages.
April 06, 2010: The province's environmental claims ($200 million) against insolvent
AbitibiBowater have been dismissed by a Quebec judge. The province was seeking, through
bankruptcy proceedings, to have the company pay for the clean-up of several of its former.

Government assistance received:


Credits for C$ 33.3 M from Pulp & Paper Green Transformation Program, managed by NRCan.
Sept 23: Bowater Mersey Paper Co Ltd. (subsidiary of AbitibiBowater) received Can$ 2.5 M from
the Nova Scotia Government through the Community Development Trust Fund.
May 09: The Courts approved a US$1 00 million loan guarantee from the Government of Quebec to
AbitibiBowater.

000625

..

'
Annex
Ooerations: (Ref: Feb 25, 2010 Press release): AbitibiBowater owns or operates 22 pulp and paper mills in
the United States, Canada, and South Korea, and 27 wood products facilities located in Canada. Most
Canadian operations are in Quebec and Ontario.
Employees: (Ref: SEC filing: Form 10-K, for 2009, filed March 31, 2010) AbitibiBowater has 12,100
employees of whom about 8,800 were represented by bargaining units. In Canada unionized employees
represented predominantly by the Communications, Energy and Paperworkers: CEP. Canada has over 8500
employees of which over 5400 are in Quebec.

are

Markets: 90 countries around the globe


Products: ($): 48o/o Newsprint; 37% Coated and Specialty Papers; 9% Market Pulp; 6% Wood Products
Distribution of sales: (based on 2008 Annual Report)
Newsprint: 48% United States; 8% Canada; 3% Asia; 12% Europe; 17% Latin America; 2% Other countries
Coated and Specialty Papers: 83% United States; 11% Canada; 2% Asia; 2% Europe; 2% Latin America
Wood Products: 42% United States; 58% Canada
Market Pulp: 60% United States; 3% Canada; 6% Asia; 19% Europe; 12% Latin America
Financial figures:( Ref: SEC filing: Form 10-K, for 2009, filed March 31, 2010)
Overview of Financial data 2007-2009 (ending Dec 31"1)
(In millions, except per share amounts or otherwise indicated)

2009

%
change
efrom
2008

2007

Observations:

Positive cash flow in 2009 in operating activites.


Decrease in total sales by 36% and employees by 24 % ( since 2008)
Large decrease in long-term debt and total debt (75% decrease from 2008).
Increase in total liabilities by 8% from 2008.
In general, average decrease by 1/3 in sales, which Abitibi states is due to poor shipment volumes and lower transaction
prices from industry and market downturn.
Biggest decrease in sales in core business of newsprint (44% decrease, near 2007 levels).

Under the Creditor Protection Proceedings. For more information, see "Total Debt" p.lll of SEC filing, Form 10-K
AbibitiBowater, March 31st 2010.
2
Including pre-petition and post-petition liabilities.

000626

Pages 627 to I

a 628

are withheld pursuant to sections


sont retenues en vertu des articles

20(1 )(b), 20(1 )(c), 20(1 )(d)

of the Access to Information Act


de la Acces

a l'information

Pages 629 to I

a 637

are withheld pursuant to sections


sont retenues en vertu des articles

20(1 )(b), 20(1 )(c), 20(1 )(d)

of the Access to Information Act


de la Acces

a l'information

Qovernment Environmental Clean-Up Orders Subject to CCAA Debt Restructuring - Arti... Page 1 of 3

Government Environmental Clean-Up Orders


Subject to CCAA Debt Restructuring
business is our signature

4/14/2010
Bernard Boucher, Robert Fishlock, Susan Grundy & Simon jun Seida (Student-at-Law)
On March 31, 2010, the Superior Court of Quebec (Court), in Re AbitibiBowater Inc., issued an important
decision on when a government regulatory order may be treated as a creditor claim in proceedings under
the federal Companies' Creditors Arrangement Act (CCAA). The Court ruled that a number of environmental
clean-up orders issued by the Government of Newfoundland and Labrador (Newfoundland Government)
against a group of Abitibi and Bowater companies (Abitibi) were really claims for the payment of money. As
a result, the Court held that the claims were subject to the stay of proceedings that had been issued in
Abitibi's CCAA debt restructuring case and subject to being compromised.
The Newfoundland Government had argued that its clean-up orders were regulatory orders that were
specifically excluded from the CCAA stay. The CCAA order issued with respect to Abitibi specifically stated
that government "powers, rights or duties in relation to matters involving public health, safety, security,
public order or the environment" were not stayed. However, the same section of the Court order said that
government "financial or monetary fines or orders shall be stayed." Accordingly, the Newfoundland
Government took the position that the orders were not monetary "claims" and were therefore not subject to
the CCAA stay order and process established to compromise creditor claims against Abitibi.
The Court rejected the Newfoundland Government's arguments on a number of grounds. The Court drew a
distinction between compliance with regulatory orders made in connection with a CCAA debtor's continuing
business operations and Abitibi's situation, where the government's environmental orders related to longstanding historical contamination of lands that Abitibi no longer owned. In fact, most of Abitibi's lands in
Newfoundland had been expropriated by the Newfoundland Government in December 2008 in what many
saw as a highly unusual reaction to Abitibi's financial difficulties.
The Court concluded that the real purpose of the environmental orders was to create claims by the
Newfoundland Government that it could assert in response to Abitibi's claims for compensation for the
expropriation of its Newfoundland assets. As such, the claims were really claims for money and not just a
regulatory matter. The Court also noted that if Abitibi had to comply with the environmental orders, the
effect would have been to give the Newfoundland Government a super-priority over the claims of other
creditors. The Court held that this would be contrary to the principles of the CCAA and unjust to Abitibi's
other creditors.

The Factual Background


Abitibi carried on extensive industrial activities in the province of Newfoundland and Labrador for most of
the 20th century. Facing economic difficulties, it decided to end its operations in the province in December
2008. Shortly after Abitibi announced the closure of its last mill, the Newfoundland Government nationalized
substantially all of the company's assets in the province, without compensation.
AbitibiBowater Inc., being a U.S. corporation, filed a notice of intent in April 2009 to submit the matter to
arbitration under Chapter 11 of the North American Free Trade Agreement (NAFTA). A notice of arbitration
requesting compensation in excess of C$300-million was filed on February 25, 2010. From July through
November 2009, the Newfoundland Government carried out environmental site assessments on former
Abitibi properties across the province. It also sought access to the company's financial information, which
request was denied by the Court in November 2009.
Three days later, the Newfoundland Government issued five ministerial orders under the provincial
Environmental Protection Act (EPA) requiring Abitibi to (i) submit remediation action plans for five properties
to the Newfoundland Government by January 15, 2010; (ii) complete site remediation actions by January
15, 2011; and by the same date, (iii) close all landfills and lagoons/impoundments associated with those
properties. Complying with the orders involved costs estimated at over C$100-million. Similar environmental
orders may be issued by all Canadian provincial governments.
Abitibi did not comply with the first deadline. It contended that the Newfoundland Government was using
the orders to dissuade it from pursuing compensation or to offset any future compensation awarded to

http://www.blakes.com/english/view_printer_bulletin.asp?ID=3903

2010-11-25

000638

Government Environmental Clean-Up Orders Subject to CCAA Debt Restructuring- Arti... Page 2 o(3
Abitibi. As proof, counsel for Abitibi pointed to a declaration by the provincial premier that "there would not
be a net payment to Abitibi." In the context of this intense dispute, the Newfoundland Government asked
the Court to declare that its EPA orders were unaffected by the CCAA stay and claims procedure order under
which creditors of Abitibi were required to file proofs of claim in connection with their claims against the
company.
Position of the Parties
According to the Newfoundland Government, EPA orders are not the same as monetary fines because they
simply require Abitibi to honour statutory obligations by carrying out work to restore the environment. As
such, EPA orders are not "claims" that are subject to the claims process and stay imposed by the Court
pursuant to the CCAA. Additional constitutional arguments were also made but not ultimately ruled upon.

For its part, Abitibi contended that the EPA orders were a tactical move by the Newfoundland Government,
which chose to deliberately ignore the CCAA claims process. Permitting the enforcement of the EPA orders
would give the Newfoundland Government an unwarranted preference over other creditors and, since it
would primarily benefit confiscated land, would give the Newfoundland Government a windfall by enhancing
the value of land it seized without compensation. Abitibi also argued that since the assets had been
confiscated, the Newfoundland Government bore the primary responsibility for dealing with their
environmental condition.
Opinion of the Court
The Court noted certain peculiarities in the environmental assessment reports prepared on behalf of the
Newfoundland Government. For example, they were addressed to the lawyers representing the
Newfoundland Government in the NAFTA and CCAA proceedings. Also, they failed to indicate whether the
land was owned by Abitibi. Finally, they failed to account for pollution by third parties, which appeared
probable for some sites. After reviewing the legal framework of the CCAA and the EPA, the Court explained
that the key issue in this case was whether the EPA orders gave rise to statutory non-monetary or monetary
obligations. In arriving at its decision, the Court found six considerations were particularly important.

1.

The CCAA has broad and remedial goals and clearly establishes, through recent amendments, that
Courts can make appropriate orders to limit regulatory actions against a debtor, especially when
monetary orders are in play (although the amendments did not directly apply in Abitibi's case,
because they came into effect after the case began, the judge found the policy underlying them to be
persuasive).

2.

This was not a case where the current owner of a site is asked to remedy an environmental condition
with respect to ongoing operations. The Newfoundland Government, now owner of most of the sites,
would be the primary monetary beneficiary of the improvements it was asking Abitibi to undertake.
As such, the Newfoundland Government was acting more like a creditor than a regulator.

3.

The Newfoundland Government was targeting Abitibi specifically and not attempting the general
enforcement of its statutory duties. The deadlines set in the EPA orders, and the fact that Abitibi had
no legal right to access most of the sites, showed that the Newfoundland Government likely expected
that Abitibi would end up having to pay compensation in lieu of complying with the orders.

4.

The facts show that the Newfoundland Government had begun requesting proposals for some of the
remediation work. As a result, the EPA orders were now akin to contingent claims, which Courts
routinely evaluate during CCAA proceedings.

5.

While previous decisions in which a public authority was found to be acting as a regulator rather than
as a creditor, they were distinguishable from the Abitibi case. In those cases, authorities were
seeking to enforce a general law and did not stand to benefit financially. Here, since Abitibi did not
own most of the properties, and since it no longer carries on business in the province, the
Newfoundland Government would likely have to carry out the remediation work itself and pursuant to
another provision of the EPA, charge Abitibi for it. Consequently, the Newfoundland Government
appeared to be acting much more like a creditor than a regulator.

6.

Finally, granting the Newfoundland Government a super-priority above all other creditors would
seriously hamper the restructuring of Abitibi under the CCAA - a federal law that, under the
paramountcy doctrine, cannot be overridden by provincial legislation. In particular, the Court noted
that the Newfoundland Government's position was inconsistent with amendments made to the CCAA
between 1992 and 2009 that provided Canadian governments with a limited priority or lien against a
debtor's real property that is the subject of a claim "for costs of remedying any environmental
condition or environmental damage affecting real property of the company" and only against such
real property. Subsection 11.8(9) of the CCAA specifically states that such an environmental claim

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2010-11-25

000639

qovernment Environmental Clean-Up Orders Subject to CCAA Debt Restructuring - Arti... Page 3 of 3
against a debtor company shall be a claim under the act, although this still begs the question of
when is an environmental order regulatory in nature as opposed to a claim for environmental costs
or otherwise monetary in nature.
For those reasons, the Court denied the Newfoundland Government's demand and stayed the EPA orders for
the duration of the stay order issued by the Court under the CCAA. The Court held that the Newfoundland
Government could file its environmental claims in accordance with the claims procedure order. However,
seeing as the government was already out of time and all claims had been barred, the government would
need to request and be granted an extension of time to do so.
Conclusion
Although recent amendments to the CCAA and the Bankruptcy and Insolvency Act (BIA) have clarified how
courts should treat government environmental orders, the Abitibi case provides a useful example of how the
struggling forestry industry in Canada is at the centre of face-offs between companies, their creditors and
governments. This decision provides some helpful certainty to an important and hopefully equitable process
of making the best of a sad situation. Canadian courts can be expected to analyze regulatory orders closely
under both the CCAA and the BIA, to determine their true nature The key issue is whether the order is a
simple statutory compliance order or a disguised monetary order.
Sections 11.1 of the CCAA and 69.6 of the BIA now provide (as of September 18, 2009) a statutory
exception for regulatory action from the effect of stays under both acts. Such regulatory action includes an
"investigation" and "suit or proceeding" but does not include the "enforcement of a payment ordered by the
regulatory body or a court." Both statutes provide the following procedure:

(3) On application by the [company/insolvent person] and on notice to the regulatory body and to the
persons who are likely to be affected by the order, the court may order that [the stay exception for
regulatory action] not apply in respect of one or more of the actions, suits or proceedings taken by or before
the regulatory body if in the court's opinion
(a) a viable [compromise, arrangement or proposal] could not be made in respect of the
[company/insolvent person] if that subsection were to apply; and
(b) it is not contrary to the public interest that the regulatory body be affected by the (stay]
provided by [s. 11.02 of the CCAA or ss. 69 or 69.1 of the BIA].

( 4) If there is a dispute as to whether a regulatory body is seeking to enforce its rights as a creditor, the
court may, on application by the [company/insolvent person] and on notice to the regulatory body, make an
order declaring both that the regulatory body is seeking to enforce its rights as a creditor and that the
enforcement of those rights is stayed.
For further information, please contact any of the members of our Environmental or Restructuring &
Insolvency Groups.

The maienals on the Blakes website are provided for 1nformat1onai purposes only.
this information does not
create a
relationship The availability of this information does not
that
or any of its lawyers is
junsdiction other than those in which its offices are
situated. The information does not
or an opinion on any 1ssue. The Information may, as a
of the passage of time, changes in the
court decisions. no longer be accurate. Although we endeavor to ensure the accuracy of the information,
relied upon Without reco;ving advice from a lawyer.
You may display on your computer. down load and print a
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notice "(0 Blake, Cassels & Graydon LLP'' and the terms of this limited license. However, no part
source, bears our
of
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BUSINESS are trade-marks of Blake, Cassels & Graydon

the BLM<.ES BULLETIN and SLAKES MEANS

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2010-11-25

000640

Page 1 of4

Vanstone, Melanie
From:

COLI N. Bird@international.gc.ca

Sent:

April 15, 2010 4:27 PM

To:

Vanstone, Melanie

Cc:

sylvie. tabet@international.ge. ea; Mehmet. Karman@international.gc.ca

Subject:

5.14
5.15(1)
5.23

Hi Melanie:

I~Yi::IIU::;

Col in

From: Solursh, Michaei-JLTA


Sent: April 13, 2010 4:31 PM
To: Bird, Colin -TNS
Cc: Karman, Mehmet -TNS; Kronby, Matthew -JLT; Tabet, Sylvie -JLTB; Cheetham, Hugh -JLTA; Bandy,
Christophe -JLTB; Souccar, Linda -JLT; Niarchos, Joanna -JLTA
Subject:~

Colin,

2010-04-15

000641

Pages 642 to I

a 643

are withheld pursuant to sections


sont retenues en vertu des articles

14, 15(1), 23

of the Access to Information Act


de la Acces

a l'information

Page 4 of4
Tel./tel. (613) 995-1295
Faxltelec. (613) 944-3213
micbael.solursh@international.gc.ca

;.

2010-04-15
, ..,.;;;;,

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UM!414i

000644

AbitibiBowater : Une offre d'achat pour quatre usines 1 Quebec I Radio-Canada.ca

Page 1 of2

Abonnez-vous aux fils RSS


Quebec
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Tous les fils RSS de Radio-Canada
Quebec

AbitibiBowater

Une offre d'achat pour quatre usines


Mise

a jour le mardi 20 avril 2010 a 9 h 06

CommentL(i) >>PartagerCourrieiFacebook

Les usines d'AbitibiBowater de Beaupn et de Donnacona pourraient avoir trouve un nouveau


proprietaire. L'entreprise de fer et metal AIM a depose une offre d'achat pour ces deux usines,
ainsi que pour une usine de !'Ontario et une autre du Nouveau-Brunswick.

Une demande a ete acheminee la Cour superieure pour approuver la vente de ces usines. La
transaction s'eleverait pres de 9 millions de dollars.

AbitibiBowater n'impose.pas d'obligation de demolir les usines, toutefois, AIM devra respecter la
clause de non-concurrence. Une relance avec un produit deja fabrique par la papetiere est done
exclue.

Inquietudes dans la region

ABeaupre, ou un comite travaille

actuellement a un plan de relance, la vente a une entreprise de


demolition n'est pas rassurani:e, souligne Mario Leblanc, du CLD de la Cote-de-Beaupre. ~a
devient de plus en plus evident qu'on s'enligne vers une demolition ou une vente des actifs et <;a
nous inquiete evidemment parce qu'on perd un peu le controle sur l'avenir de cette usine la, alors
qu'on a des projets , dit-il.

http://www.radio-cailada.ca/regions/Quebec/20 10/04/19/004-aim_achat_usinesabitibibo...

2010-04-20

000645

AbitibiBowater : Une offre d'acbat pour quatre usines I Quebec I Radio-Canada.ca

Page 2 of2

L'acheteur AIM se dit pour sa part ouvert aux discussions avec tous ceux qui pourraient lui
presenter un projet de relance serieux. Une rencontre serait d'ailleurs prevue avec le comite de
relance de Donnacona.
La vente devrait etre approuvee par le tribunal la semaine prochaine.
PartagercourrieiFacebook
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Radio-Canada.ca
:Recherche .

http://www.radio-canada.calregi ons/Quebec/20 10/04/19/004-aim_ achat_usinesabitibibo .. .

201 0-04-20
000646

~bbusinessjoumal.com-

Scrap metal firm interested in shuttered Dalhousie mill\ Reid So... Page 1 of2

Scrap metal firm interested in shuttered Dalhousie mill


Published Wednesday April 21st, 2010

Acquisition: Montreal company seeks court approval to buy AbitibiBowater


assets
10
!QI

1 Telegraph-Journal
Reid Southwick

A Montreal scrap metal company wants to buy a shuttered paper mill in Dalhousie and is not ruling out
demolishing the asset that once employed more than 300 people.
(1!.1, ENLARGE PHOTO

American Iron & Metal Co. Inc. said Tuesday it's


seeking court approval to buy the New Brunswick mill
along with three other assets in Quebec and Ontario
from AbitibiBowater Inc., a papermaking giant in
bankruptcy protection.
The metals firm would pay AbitibiBowater about $8.7
million for the four mills and about 40 per cent of
monies raised from the sale of machinery.

Gordon Bec.k/Canwest News service

'!'m open to recreating whatever makes sense in that


area and if it requires demolishing it, we will demolish it;
if it requires modifying it, working with people, I'm very
open to that,' says Herbert Black, president of
American Iron & Metal Co. Inc. He will consider
proposals to transform the Dalhousie mill into a money~
making asset, though the deal stipulates the mill cannot
produce newsprint and compete with AbitibiBowater.

'

Herbert Black, president of American Iron & Metal, said


he will consider proposals to transform the Dalhousie
mill into a money-making asset, though the deal
stipulates the mill cannot produce newsprint and
compete with AbitibiBowater.
Black said the metals firm has never turned a shuttered
mill into a profitable operation. He said the company
has purchased mills in Newfoundland and Labrador,
Quebec and Ontario- and demolished all of them.

"I'm open to recreating whatever makes sense in that area and if it requires demolishing it, we will
demolish it; if it requires modifying i~ working with people, I'm very open to tha~" Black said, later adding
that he's met with just one proponent so far.
"The last thing on my list is to demolish it, but people who come with ideas and want to develop the area
have to have some money and put some money up."
AbitibiBowater shut down the Dalhousie mill in 2008 amid a period of near-collapse in the forestry
industry. About330 people lost their jobs in the economically ravaged northern region of the province.
Pat Roy, a union official who represents former AbitibiBowater employees, said he doubted the mill
could be modified into a profitable operation because of the asset's age and the conditions of the sale
agreement.
He said it's important courts approve the sale to help AbitibiBowater emerge from bankruptcy protection.
A bankrupt company could spell financial troubles for the pension plan, which former mill workers
depend on, he said.

http://nbbusinessjournal.canadaeast.com/front/article/1 024024

2010-04-21

000647

n.bbusinessjournal.com- Scrap metal firm interested in shuttered Dalhousie mill! Reid So... Page 2 of2
Officials on both sides of the deal said they don't know when the assets are expected to exchange
hands, though court hearings are scheduled for later this month. Courts in Canada and the United
States must approve the sale.
"Those mills have been shut for a long time, so they are sitting assets that have some value," said JeanPhilippe Cote, spokesman for AbitibiBowater.
"We are trying to sell them so we can have additional liquidity for the company. it's certainly important,
especially in the context of the current restructuring process."
AbitibiBowater filed for bankruptcy protection last year and is now in the process of restructuring. Cote
declined to offer any details about what the firm may become or what assets will drive its operations
once it emerges from financial turmoil.
American Iron & Metal recycles metals and manufactures alloy and solder products, with about $1.6billion in sales, Black said. The company has operations across the globe, including China, Mexico,
Rhode Island and Montreal, he said.

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"A Montreal scrap metal company wants to buy a shuttered paper mill in Dalhousie and is not ruling out
demolishing the asset that once employed more than 300 people."
Um, the mill probably peaked at around 1100 employees. Great fact finding ...
Anyway, I'm really interested in seeing what the court will tell Abitibi-Bowater what to do with the money that they
gain from the sale. Hopefully, they'll be forced to put it into their pension plan, which Abilibi-Bowater has been
trying to cut for pensioners.

1 ~ THUMBS UP

0 ~ THUMBS DOWN

&:j FLAG AS INAPPROPRIATE

Northern Girl, Truro on 21/04/10 11 :54:22 AM ADT


ALL COMMENTS ARE SUBJECT TO THESE TERMS OF USE

http://nbbusinessjournal.canadaeast.com/front/article/1 024024

2010-04-21

000648

Pages 649 to I

a 653

are withheld pursuant to sections


sont retenues en vertu des articles

14, 21(1)(b), 21(1)(c)

of the Access to Information Act


de la Acces

a l'information

Message

Page 1 of3

Gilbert, Anne

5.21 (1 )(b)

From:

Smith, Robert

5.23

Sent:

April22, 2010 11:18 AM

To:

Gilbert, Anne

Subject: FW: AbitibiBowater

An ne,

-----Original Message----From: Maille, Marie Anick On Behalf Of Macleod, Alfred


Sent: February 9, 2009 5:54PM
To: Aterman, Paul; Gilbert, Anne; Smith, Robert
Subject: FW: AbitibiBowater
FYI. ..
-----Original Message----From: Alfred.Leblanc@fin.gc.ca [mailto:Aifred.Leblanc@fin.gc.ca]
Sent: February 9, 2009 5:49PM
To: Macleod, Alfred
Subject: FW: AbitibiBowater
Alfred,

Alfred LeBianc
Director I Directeur
Federal-Provincial Relations Division 1 Division des relations federales-provinciales
Federal-Provincial Relations and Social Policy Branch 1 Direction des relations federales-provinciales et de la
politique sociale
Department of Finance Canada 1 Ministere des Finances Canada
Ottawa, Canada K1A OG5

Telephone 1 Telephone 613-992-6786 I Facsimile 1 Telecopieur 613-94 7-64 76/ Teletypewriter 1 Teleimprimeur
613-995-1455
Government of Canada I Gouvernement du Canada

From: Thompson, Kate

Sent: February 9, 2009 4:38PM

2010-04-22

000654

Page 2 of3

Message
To: Leblanc, Alfred
Cc: Hayes, Duane; Behboodi, Rambod
Subject: RE: AbitibiBowater

5.23

Alfred,

2010-04-22

000655

Message

s.23 Page 3 of3

Kate Thompson
Counsel! Avocate
General Legal Services Division 1 Division des services juridiques gemeraux
Law Branch 1 Direction juridique
Department of Finance Canada 1 Ministere des Finances Canada
Ottawa, Canada K1A OG5
Kate.Thompson@fin.gc.ca
Telephone I Telephone 613-94 7-0724 I Facsimile I Telecopieur 613-944-5566 I Teletypewriter I T eleimprimeur
613-995-1455
Government of Canada 1 Gouvernement du Canada

2010-04-22

000656

Pages 657 to I

a 711

are withheld pursuant to sections


sont retenues en vertu des articles

20(1 )(b), 20(1 )(c), 20(1 )(d)

of the Access to Information Act


de la Acces

a l'information

Pages 712 to I

a 716

are withheld pursuant to sections


sont retenues en vertu des articles

14, 21(1)(b), 21(1)(c)

of the Access to Information Act


de la Acces

a l'information

Page 1 of4

Message

Gilbert, Anne
From:

Smith, Robert

Sent:

April 26, 201 0 4:06 PM

To:

Gilbert, Anne

Subject: FW: AbitibiBowater


Hi Anne, I just found this clarification,

5.21 (1 )(b)

-----Original Message----From: Smith, Robert


Sent: February 9, 2009 5:26PM
To: 'Kate.Thompson@fin.gc.ca'
Subject: RE: AbitibiBowater
Hi Kate, thanks very much for this clarification, it is very much appreciated & thanks for your time to discuss this
afternoon.

Robert F. Smith
Senior Strategic Policy Analyst I Analyste principal en politiques strah~giques
Constitutional and Legal Affairs 1 Affaires constitutionnelles et juridiques
Strategic Policy and Research 1 Politiques strategiques et recherche
Intergovernmental Affairs 1 Affaires intergouvernementales
Privy Council Office 1 Bureau du Conseil prive
66 Slater Street, Room 900-B 1 66, rue Slater, piece 900-B
Ottawa, Canada K1A OA3
f.$...0'J.i.t.b@P..G.Q.:.b.G.P..,.QQ,_Q_g_
Telephone 1 Telephone (613) 947-7009
Facsimile 1 Telecopieur (613) 947-7581
Government of Canada I Gouvernement du Canada
-----Original Message----From: Kate.Thompson@fin.gc.ca [mailto:Kate.Thompson@fin.gc.ca]
Sent: February 9, 2009 4:27 PM
To: Smith, Robert
Subject: RE: AbitibiBowater
Hi Robert,

2010-04-28

5.21 (1 )(b)
5.23

000717

Page 2 of4

Message
Kate Thompson
Counsel[ Avocate
General Legal Services Division 1 Division des services juridiques generaux
Law Branch I Direction juridique
Department of Finance Canada 1 Ministere des Finances Canada
Ottawa, Canada K1A OG5
Kate.Thompson@fin.gc.ca
Telephone 1 Telephone 613-94 7-0724 I Facsimile 1 Telecopieur 613-944-5566 I Teletypewriter
Teleimprimeur 613-995-1455
Government of Canada 1 Gouvernement du Canada

Daparbn&nt of Flnanoe
Canada

Mlnhltare des finances

Canada

Canadrl

From: Smith, Robert [mailto:Robert.Smith@pco-bcp.gc.ca]


Sent: February 9, 2009 2:49PM
To: Thompson, Kate
Subject: RE: AbitibiBowater
ok, great, we'll call you in the next few minutes for a talk

5.21 (1 )(b)

-----Original Message----From: Kate.Thompson@fin.gc.ca [mailto:Kate.Thompson@fin.gc.ca]


Sent: February 9, 2009 2:38 PM
To: Smith, Robert
Subject: RE: AbitibiBowater

5.23

That would be fine.

Kate Thompson
Counsel[ Avocate
General Legal Services Division 1 Division des services juridiques generaux
Law Branch I Direction juridique
Department of Finance Canada 1 Ministere des Finances Canada
Ottawa, Canada K1A OG5
Kate.Thompson@fin.gc.ca
Telephone 1 Telephone 613-947-07241 Facsimile 1 Telecopieur 613-944-55661 Teletypewriter
Teleimprimeur 613-995-1455
Government of Canada [ Gouvernement du Canada

Daparbnant of Flnanoe
Canada

Mlnhltwe dea financaa

Canada

Canadrl

From: Smith, Robert [mailto:Robert.Smith@pco-bcp.gc.ca]


Sent: February 9, 2009 2:36PM
To: Thompson, Kate
Subject: RE: AbitibiBowater
Thanks Kate, my colleague Anne Gilbert (specializing in Newfoundland & L. issues) and I will give
you a call in about 20 min. if that's still good for you.

2010-04-28

000718

Page 3 of4

Message

-----Original Message----From: Kate.Thompson@fin.gc.ca [mailto:Kate.Thompson@fin.gc.ca]


Sent: February 9, 2009 1:51 PM
To: Smith, Robert
Subject: RE: AbitibiBowater

5.23

Hi Robert,

I am around so whenever you want to call is fine. Depending on the nature of


your questions I may have to involve my director as he provided input into the
note as well.
Kate Thompson
Counsel I Avocate
General Legal Services Division 1 Division des services juridiques gemeraux
Law Branch 1 Direction juridique
Department of Finance Canada 1 Ministers des Finances Canada
Ottawa, Canada K1A OG5
Kate.Thompson@fin.gc.ca
Telephone 1 Telephone 613-947-0724 I Facsimile 1 Telecopieur 613-944-5566 I
Teletypewriter 1 Teleimprimeur 613-995-1455
Government of Canada 1 Gouvernement du Canada

1
T
1.6.

Depar1m&nt of Finance
Canada

MlnistiH'e des Finances


Canada

Canad

From: Smith, Robert [mailto:Robert.Smith@pco-bcp.gc.ca]


Sent: February 9, 2009 1:37PM
To: Thompson, Kate
Subject: AbitibiBowater

5.21 (1 )(b)

Kate, would it be possible to speak this afternoon

Robert F. Smith
Senior Strategic Policy Analyst 1 Analysts principal en politiques strategiques
Constitutional and Legal Affairs 1 Affaires constitutionnelles et juridiques
Strategic Policy and Research I Politiques strategiques et recherche
Intergovernmental Affairs 1 Affaires intergouvernementales
Privy Council Office 1 Bureau du Conseil prive
66 Slater Street, Room 900-B 1 66, rue Slater, piece 900-B
Ottawa, Canada K1A OA3
rsmith@pco-bcp.gc.ca
Telephone 1 Telephone (613) 947-7009
Facsimile 1 Telecopieur (613) 947-7581
Government of Canada 1 Gouvernement du Canada

2010-04-28

000719

Message

Page 4 of4

5.14
5.23

2010-04-28

000720

s.23

Page 1 of 5

Smith, Robert
From:

Hill, Patrick

Sent:

April 28, 2010 6:05 PM

To:

'Rambod. Behboodi@fin.gc.ca'; Kate. Thompson@fin.gc.ca

Cc:

Smith, Robert; Gilbert, Anne; Vanstone, Melanie

Subject: RE:

Patrick Hill
Assistant Director 1 Directeur adjoint
Legal Operations 1 Operations juridiques/conseillers
Privy Council Office 1 Bureau du Conseil Prive
Ottawa, Canada K1A OA3
patrick.hill@pco-bcp.gc.ca
Telephone 1 Telephone 613-957-5777
Facsimile 1 Telecopieur 613-957-5032
Government of Canada 1 Gouvernement du Canada
From: Rambod. Behboodi@fin .gc.ca [ mailto: Rambod. Beh boodi@fin.gc.ca]

Sent: April 28, 2010 5:43 PM


To: Hill, Patrick; Kate.Thompson@fin.gc.ca
Cc: Smith, Robert; Gilbert, Anne; Vanstone, Melanie
Subject: RE: 1

Sylvie T'abet and I'v1atthew Kronby at Jl:r are best-placed to address your issues.

Rambod Behboodi
General Counsel and Executive Director I Avocat general et Directeur executif
General Legal Services I Services juridiques generaux
Department of Finance Canada I Ministere des Finances Canada
Ottawa, Canada K1A OGS
tafDQ9~,J?~hJ?gq~li@fig,gc:;,<,:~

'Telephone I "Telephone 613 99.5 8724 I Facsimile I 'f'(:lecopieur 613 944 5566
Teleimprimeur 613--995-1455 I Blackberry 613 894 5543
(~overnment

of Canada

Teletypewriter

I Gouverncment du Canada

2010-12-10

000721

Page 2 of5

5.23
From: Hill, Patrick [mailto:Patrick.Hill@pco-bcp.gc.ca]

Sent: Wednesday, April 28, 2010 5:41 PM


To: Behboodi, Rambod; Thompson, Kate
Cc: Smith, Robert; Gilbert, Anne; Vanstone, Melanie

Subject: I
Solicitor Client
Dear Rami:Jod Thanks for your email.

Best regards,

Patrick Hill
Assistant Director 1 Directeur adjoint
Legal Operations 1 Operations juridiques/conseillers
Privy Council Office 1 Bureau du Conseil Prive
Ottawa, Canada K1A OA3
Q~tdck. hi U@QcQ.:-_PCJ>_,gQ,_Q_~

Telephone 1 Telephone 613-957-5777


FacsimilE! 1 Telecopieur 613-957-5032
Government of Canada 1 Gouvernement du Canada
From: Rambod.Behboodi@fin.gc.ca [mailto:Rambod.Behboodi@fin.gc.ca]

Sent: April 28, 2010 1:16PM


To: Hill, Patrick; Kate.Thompson@fin.gc.ca
Cc: Smith, Robert; Gilbert, Anne; Vanstone, Melanie

Subject:

--

Patrick

2010-12-10

000722

s.23

Page 3 of5

Rambod Behboodi
General Counsel and Executive Director I A vocat general et Directeur executif
General Legal Services I Services juridiques generaux
Department of Finance Canada I Ministere des Finances Canada
Ottawa, Canada K1A OGS
rambod.behboodi({i~fin.gc.ca

Telephone I Telephone 61.3 995 8724 I F'acsirnile I Tdecopieur 613 944 5566
TclCimprimeur 613-995-1455 I Blackberry 613 894 5543
Government of Canada

Teletypewriter

I Gouvernement du Canada

From: Hill, Patrick [mailto:Patrick.Hill@pco-bcp.gc.ca]


Sent: Wednesday, April28, 2010 11:49 AM
To: Behboodi, Rambod; Thompson, Kate
Cc: Smith, Robert; Gilbert, Anne; Vanstone, Melanie

Subject:

Dear Rambod and Kate -

2010-12-10

000723

Page 724
is withheld pursuant to section
est retenue en vertu de l'article

23
of the Access to Information Act
de la Acces

a l'information

s.23
Page 5 of5

Best regards,

Patrick Hill
Assistant Director 1 Directeur adjoint
Legal Operations 1 Operations juridiques/conseillers
Privy Council Office 1 Bureau du Conseil Prive
Ottawa, Canada K1A OA3
R~trick,hHI@Qcq:.bep,ge_,c~

Telephone I Telephone 613-957-5777


Facsimile 1 Telecopieur 613-957-5032
Government of Canada 1 Gouvernement du Canada

2010-12-10

000725

Page 1 of4

5.23
Smith, Robert
From:

Vanstone, Melanie

Sent:

April 28, 2010 2:28 PM

To:

'Rambod.Behboodi@fin.gc.ca'; Hill, Patrick; 'Kate.Thompson@fin.gc.ca'

Cc:

Smith, Robert; Gilbert, Anne

Subject: Re:
Hi all

Sent from my BlackBerry Wireless Handheld

Sent from Wireless Network I Envoye du reseau sans fil.

From: Rambod.Behboodi@fin.gc.ca <Rambod.Behboodi@fin.gc.ca>


To: Hill, Patrick; Kate.Thompson@fin.gc.ca <Kate.Thompson@fin.gc.ca>

Cc: Smith, Robert; Gilbert, Anne; Vanstone, Melanie

Sent: Wed Apr 28 13:15:49 2010


Subject:
Patrick

Rambod Behboodi
General Counsel and Executive Director I Avocat general et Directeur executif
General Legal Services I Services juridiques generaux

2010-12-10

000726

Pages 727 to I

a 738

are withheld pursuant to sections


sont retenues en vertu des articles

14,23

of the Access to Information Act


de la Acces

a l'information

Pages 739 to I

a 750

are withheld pursuant to sections


sont retenues en vertu des articles

14,23

of the Access to Information Act


de la Acces

a l'information

Pages 751 to I

a 756

are withheld pursuant to sections


sont retenues en vertu des articles

14,23

of the Access to Information Act


de la Acces

a l'information

Page 1 of 1

Smith, Robert
From:

Hill, Patrick

Sent:

April 30, 2010 2:53PM

To:

Smith, Robert

Cc:

Gilbert, Anne

5.23

Subject:

From: Smith, Robert


To: Hill, Patrick
Cc: Gilbert, Anne
Sent: Fri Apr 30 14:30:34 2010

Subject:;
Patrick,

Robert F. Smith
Senior Strategic Policy Analyst 1 Analyste principal en politiques strategiques
Constitutional and Legal Affairs 1 Affaires constitutionnelles et juridiques
Strategic Policy and Research 1 Politiques strategiques et recherche
Intergovernmental Affairs 1 Affaires intergouvernementales
Privy Council Office 1 Bureau du Conseil prive
66 Slater Street, Room 900-B 1 66, rue Slater, piece 900-B
Ottawa, Canada K1A OA3
f$JD.itb@.QGQ:QGP,QG,G~

Telephone 1 Telephone (613) 947-7009


Facsimile 1 Telecopieur (613) 947-7581
Government of Canada 1 Gouvernement du Canada

2010-12-10

000757

SECRET
MEMORANDUM FOR SERGE DUPONT
QUEBE~SSUPEmORCOURTRUUNG

REGARDING REMEDIATION OF ABITIBIBOWATER SITES


5.14
5.21 (1 )(b)

(Information Only)

SUMMARY
0

This note provides additional information on Newfoundland and Labrador's (N 1 vourt action against
AbitibiBowater (AB) pertaining to environmental remediation of its former sites in the province.

In April 2009, the Quebec Superior Court issued an initial order pursuant to the Companies' Creditors
Arrangement Act (CCAA} with respect to AbitibiBowater which placed the company under creditor
protection. A First Stay Extension Order issued in May 2009 included an amendment that the Crown or
its agents could exercise its powers on matters involving public health, safety, security, public order or the
environment, but could not impose monetary fines on the company.

In November 2009, the Newfoundland and Labrador government issued five ministerial orders against AB
pursuant to the NL Environmental Protection Act (EPA). The EPA Orders were in relation to five sites in
the province where the company had carried on industrial activities at different times betwe.en 1905 and
2008 (including the expropriated mill in Grand-Falls Windsor). The province also served a Motion
pursuant to the EPA to the Quebec Superior Court (because AB filed for creditor protection in Quebec} in
which it argued that the ministerial orders were not "creditor claims" under the CCAA, as they do not
require the company to make payments to the province but rather to comply with its obligations for the
protection of the environment.

The ruling by the Quebec Superior Court on March 31, 2010, dismissed NL's motion and ruled that the
EPA Orders are, in substance, financial or monetary in nature, and are thus prohibited under the
First Stay Extension Order. The province's appeal will be heard on May 12, 2010. In its motion to appeal
the province cites a number of constitutional issues (i.e. the obligation to apply and enforce
constitutionally valid provincial laws).

Natasha Rascanin
Gilbert/dr

000758

COURT OF APPEAL

CANADA
PROVINCE OF QUEBEC
DISTRICT OF MONTREAL

IN THE MATTER OF THE PLAN OF


COMPROMISE OR ARRANGEMENT OF:
ABITIBIBOWATER INC.

and
ABITIBICONSOLIDATED INC.

and
BOWATER CANADIAN HOLDINGS INC.

and the other Petitioners listed on


Schedules A, B and C
Debtors

and
ERNST & YOUNG INC.

Monitor

and
HER MAJESTY THE QUEEN IN RIGHT OF
THE PROVINCE OF NEWFOUNDLAND
AND LABRADOR

Petitioner

000759

MOTION FOR LEAVE TO APPEAL


Pursuant to Sections 13 and 14 of the Companies' Creditors Arrangement
Act, R.S.C. 1985, c. C-36 and Articles 29, 494 and 511 of the CCP

TO ONE OF THE HONOURABLE JUDGES OF THE COURT OF APPEAL,


SITTING IN AND FOR THE DISTRICT OF MONTREAL, HER MAJESTY THE
QUEEN IN RIGHT OF THE PROVINCE OF NEWFOUNDLAND AND LABRADOR
RESPECTFULLY SUBMITS THE FOLLOWING:
OVERVIEW

1.

On 31 March 2010, the Honourable Mr. Justice Clement Gascon, J.S.C. of


the Superior Court of the District of Montreal, acting pursuant to the
Companies' Creditors Arrangement Act, R.S.C. 1985, c. C-36 ("CCAA" and
"CCAA Court"), rendered a judgment in file number 500-11-036133-094. A
copy of the judgment is attached to the present Motion as Exhibit A-1, and
can be found at Tab A-1 of the Supporting Documents Brief ("Judgmenf').
The Judgment dismissed a motion brought by Her Majesty the Queen in
Right of the Province of Newfoundland and Labrador ("Province") and
granted certain relief sought in the Contestation filed by the Debtors
("Abitibi" or "Company11 ).

2.

The Province's motion in effect was for an order declaring that the Claims
Procedure Order which the CCAA Court had made on 26 August 2009
{"CPO"), attached hereto as ExhibitA-4, and can be found at Tab A-4 of the
Supporting Documents Brief, did not immunise Abitibi from having to comply
with orders ("EPA Orders", which were submitted as Exhibit NL-6 at the
Motion and are attached hereto at Tab B-3 of the Supporting Documents
Brief) that the Minister of Conservation and the Environment of the Province
("Minister") had issued against the Company pursuant to the Province's
Environmental Protection Act, S.N.L 2002, c. E-14.2 ("EPA", which was
submitted as Exhibit NL~7 at the Motion and which is attached hereto as Tab
B-4 of the Supporting Documents Brief) requiring the Company to remediate
at its expense polluted property in the Province that is contaminated.

3.

The motion focussed on particular provisions of the CPO that purported


permanently to bar and extinguish all statutory duties that Abitibi owed as at
the date of the Initial Order granted in these proceedings, such as Abitibi's
obligations under the EPA Orders to develop and execute remediation plans
with respect to contamination on properties located in the Province.

000760

- 2-

4.

At its heart, the motion concerned the Province's constitutional right to


enforce its laws (and in particular its environmental law), the Company's
obligation to comply with the Province's laws, and the CCAA Court's
constitutional obligation to enforce the laws of the Province.

5.

Her Majesty the Queen in Right of the Province of British Columbia and the
Attorney General for the Province of British Columbia (together, "British
Columbia") intervened on the motion in support of the Province's
constitutional submissions.

6.

The hearing on the Province's motion lasted three days between 24 and 26
February 2010. The evidence portion of the hearing lasted for approximately
one half day. An excerpt of the transcript of the Motion is communicated
herewith as Exhibit A-2, and can be found at Tab A-2 of the Supporting
Documents Brief.

7.

In a truly unprecedented judgment, the CCAA Court completely disregarded


and undermined the Province's constitutional right to have its public laws
given effect by a provincial superior court vested with jurisdiction under the
CCAA and to have those Jaws complied with by a debtor company. The
Judgment does so in these ways:
First, it immunises Abitibi from having to comply with the statutory
obligations to which Abitibi is subject under the EPA thereby imposing
on the Province the costs of complying with these obligations;
Second, it makes the EPA inapplicable to Abitibi, thereby
extinguishing the Province's right to recover from Abitibi any costs the
Province would incur were it to fulfil Abitibi's statutory obligations;
Third, it gives Abitibi the right to claim damages in the CCAA Court
from the Province arising out of the passage of the AbitibiConsolidated Rights and Assets Act, S.N.L. 2008, c. A-1.01 ("Abitibi
Act''), even though the act denies Abitibi such a right.

8.

lt is manifestly obvious from the Judgment that the Motion Judge disagreesand strongly so- with the policy choices the Legislature of the Province has
made for the benefit of the people of the Province in two statutes, and also
disagrees with how the Minister has chosen to exercise her discretionary
powers under Provincial law in accordance with those policy choices. The
Motion Judge was offended by the fact that, pursuant to its laws, the
Province both expropriated without compensation property that Abitibi owned
in the Province and then ordered Abitibi at its own expense to remove
contamination from these and other properties which Abitibi still owns.

000761

-3-

9.

Having formed the view that the Province's laws are unfair to Abitibi, the
CCAA Court has allowed Abitibi to avoid them. This is not something the
CCAA Court has any constitutional competence to do.

10.

Most fundamentally, the Judgment disregards the modern doctrines of


federalism. Federalism doctrine mandates that in the absence of conflicting
enactments of the other level of government (and there are none here), a
court should not block the application of measures which are taken to be
enacted in furtherance of the public interest. The Judgment does just that,
however. The Judgment intentionally and expressly blocks the application of
important measures taken in furtherance of the public interest of the
Province: the EPA and the Abitibi Act.

11.

Secondly, the Judgment does not accept that provincial law can affect the
bottom line under the CCM. Contrary to what the Judgment holds,
however, provincial legislation operates in the insolvency context, short of an
express conflict with federal law, of which there is none here. Thus, the
Judgment regards the negative effects of provincial law on Abitibi's
restructuring process as something to be avoided by its order, rather than as
an unavoidable consequence of the application of provincial Jaw to Abitibi.

12.

Finally, the Judgment misinterprets the CCAA itself. The Judgment is based
on an idiosyncratic definition of "claim", not the definition prescribed by
Parliament in the CCAA itself, and on the CCAA Court's having the
discretionary power to improve the debtor's post-restructuring affairs rather
than being limited to ensuring that the debtor can put a plan of compromise
and arrangement to its creditors for their consideration and vote. These
errors are themselves a by-product of the prior constitutional errors because
had the CCAA Court correctly considered the Province's constitutional
position, it could not have interpreted the CCM and its own discretionary
powers in the way it did in this case.

13.

Although the constitutional position was central to the arguments of the


Province and of British Columbia, the CCAA Court did not in express terms
decide the constitutional issues. Yet, the constitutional position was, and
remains, central to the validity of the Court's reasoning and thus had to be
addressed, and addressed directly, which the CCAA Court failed to do.

14.

The Province therefore requests that this Court grant leave to appeal from
the Judgment for the following reasons:
a.

The CCAA Court lacks the constitutional competence to bar and


extinguish duties Abitibi owed the Province under the EPA;

000762

-4-

b.

The CCAA Court lacks the constitutional competence to render laws


of the Province, and in particular the EPA, inapplicable to Abitibi on
the basis that the court disagrees with the purpose and effect of such
laws;

c.

The CCAA Court lacks the constitutional competence to subject the


exercise of a statutory discretion enjoyed by a minister of a provincial
Crown to judicial review, and in particular lacks the constitutional
competence to review the exercising by the Minister of her
discretionary powers under the EPA, and the CCAA Court exceeded
its jurisdiction in doing so in this case;

d.

The CCAA Court lacks the constitutional competence to fetter the


statutory discretion enjoyed by a minister of a provincial Crown under
that province's own laws, and in particular lacks the constitutional
competence to fetter the statutory discretion of the Minister under the
EPA, and the CCAA Court exceeded its jurisdiction in doing so in this
case;

e.

The CCAA Court lacks the constitutional competence to review the


Abitibi Act and to agree to entertain a claim against the Province
contrary to that act;

f.

The CCAA Court is constitutionally obligated to apply and enforce


constitutionally valid provincial laws, which it failed to do in this case;

g.

The Judgment conflicts with judgments of the Supreme Court of


Canada and the courts of other provinces of Canada, requiring
appellate consideration to resolve;

h.

Since the purpose and structure of the EPA is substantially the same
as the purpose and structure of environmental legislation generally in
effect throughout Canada, the jurisdiction asserted in the Judgment
has broad national implications requiring appellate consideration; and

i.

Since the Judgment purports to give a judge exercising jurisdiction


under a federal law the power to render inapplicable provincial laws of
general application when the judge disagrees with the purpose,
content or application of those laws, the Judgment has broad national
implications requiring appellate consideration.

000763

- 5-

15.

Based on the foregoing, it is clear that the EPA Motion and the Judgment
raise serious constitutional and other legal issues which are of the utmost
importance, not only to the Province, but to the practice generally, as th~y
raise fundamental issues about the right of provinces to have their public
laws enforced by a court deriving its jurisdiction and its powers from the
CCAA. As such, leave to appeal the Judgment ought to be granted.

BACKGROUND TO THE MOTION

16.

Abitibi is attempting to restructure its affairs by negotiating a plan of


compromise and arrangement with its creditors pursuant to the CCAA. Since
Abitibi's head office is located in Montreal, the restructuring process is being
supervised by the Superior Court of this Province sitting as the CCAA Court.

17.

As part of the restructuring process, the CCAA Court issued the CPO.
Amongst other things, the CPO defines "claimn to include any breach of a
statutory duty that arose before the date Abitibi was granted the Initial Order
under the CCAA, being 17 April 2009. The CPO purports to bar and
extinguish all such statutory duties unless the public body to whom the duty
is owed has reduced Abitibi's obligations under the applicable statute to a
debt and the public body has in a timely way filed a claim for payment of that
debt, for the purpose of evaluation and compromise, along with the claims of
Abitibi's unsecured creditors.

18.

The EPA, in common with environmental protection laws in force across


Canada generally, is based on the "polluter pay" principle. Based on this
principle, ttle EPA permits the Minister to impose all the direct and indirect
costs of remediating contaminated land on the person responsible for the
contamination as defined in the legislation, so that the public of the Province
will not have to incur this expense. Excerpts from the environmental
protection legislation from the provinces of Ontario, British Columbia, Alberta,
Saskatchewan, and Nova Scotia are communicated en Jiasse as Exhibit A-5,
and can be found at Tab A-5 of the Supporting Documents Brief.

19.

Section 99 of the EPA permits the Minister to issue broad orders against the
person responsible for contamination under the act, inter alia, requiring that
person to submit remediation plans for the approval of the Minister and to
perform at that person's own expense remediation work that the Minister
orders that person to perform. The Minister may impose these costs on the
person responsible without regard to whether the lands are owned by the
public or by a private third party. The Minister may impose these costs on
the person responsible without regard to whether that person was the direct
and immediate cause of the contamination. The Minister may impose these

000764

costs on the person responsible without regard to whether that person owns
the property that person has to clean up. The Minister may impose thes.e
costs on the person responsible without regard to whether that person w1ll
economically benefit from cleaning up the property.
20.

An order made under s. 99 of the EPA remains in effect until the Minister
revokes it under s. 101 of the act.

21.

Where the person responsible does not comply with an order made under
s. 99 of the EPA, the Minister may take whatever action the Minister
considers necessary to carry out the terms of the order. All the reasonable
costs incurred by the Minister in carrying out the terms of the order are
recoverable from the person against whom the s. 99 order was made as a
statutory debt to the Province.

22.

lt is only when a person has obligations pursuant to an order made under


s. 99 of the act, and without lawful excuse fails to comply with the terms of
that order, that the Minister is able to fulfil the order and to recover the costs
of having done so as a statutory debt under s. 102 of the act.

23.

Abitibi conducted large scale and intensive industrial activities throughout the
Province since 1905. At various time over this century, Abitibi was engaged
in mining, processing, wood harvesting, pulp and paper production and
related activities, such as transportation and storage of goods, materials and
energy.

24.

In late 2008 Abitibi shut down its remaining industrial activities in the
Province. In December of that year the Province passed the Abitibi Act
pursuant to which much of the property that Abitibi formerly owned in the
Province was expropriated for the public's benefit without payment of
compensation to Abitibi. In April 2009, Abitibi and its foreign affiliates
announced that they were insolvent and would attempt to restructure their
affairs under the relevant national statutes, the CCAA in the case of Abitibi.

25.

After Abitibi commenced its restructuring efforts it refused to provide the


Minister with evidence that it was going to comply with the EPA and
remediate properties the sites on which it had conducted its industrial
activities ("Abitibi Sites") in the Province and which were contaminated.
Abitibi failed to do this despite having promised the Minister that it would
remediate the Abitibi Sites and despite having in its possession various
environmental assessments and remediation plans, which it refused to share
with the Minister, to do this very thing.

000765

-7-

26.

Abitibi provided the Province with evasions and half truths about its
intentions to clean up the Abitibi Sites. Accordingly, the Province, through its
counsel, retained a leading firm of environmental consulting engineers,
Conestoga Rover & Associates ("CRA"), to perform an environmental
assessment with respect to the Abitibi Sites. A copy of the reports prepared
by CRA was submitted as Exhibit NL-5 at the Motion, and is attached hereto
at Tab 8-2 of the Supporting Documents Brief.

27.

The assessments revealed contamination on all oftheAbitibi Sites. Some of


these properties were extremely contaminated, including with heavy metals.
As a result of this information, the Minister issued five orders against Abitibi
under s. 99 of the EPA C'EPA Orders").

28.

The EPA Orders require Abitibi, inter alia, to submit for approval a detailed
remediation plan for the Abitibi Sites, to complete site remediation by
15 January 2011 or some other date as agreed with the Province's
Department of Environment and Conservation, and to close alllandfills and
lagoons et cetera associated with each site by 15 January 2011.

29.

Abitibi must remedy the contamination related to the Abitibi Sites because it
is a person responsible under the EPA (s.2(x)). Abitibi is a person
responsible because it either currently owns or formerly did own the sites, did
own or operate an undertaking on one or more of the sites, did handle or
have care, management or control of a substance or thing on one or more of
the sites, or was a previous owner of a substance or thing that is found on
one or more of the sites. For example:
a.

Abitibi was part of the Co-Tenancy that conducted mining operations


at Buchans. Abitibi expressly accepted responsibility for the
remediation of that site- the most heavily polluted of the Abitibi Sites,
and the location of both a mine and a town- both as a signatory to a
Compliance Schedule between the Province, the Federal government
and the Co~ Tenancy, and in an Action Plan filed on Abitibi's behalf by
its environmental consultants, AMEC. The Action Plan was filed after
Abitibi ceased its operations at Buchans. In that document, Abitibi
undertook to remediate the environmental contamination at the
Buchans site, without qualification. The Co-Tenancy Agreement,
Compliance Schedule, and Action Plan were submitted as Exhibits
NL-8, NL-9, and NL-10, respectively, at the Motion, and are attached
hereto at Tabs B-5, B-6, and 8-7 ofthe Supporting Documents Brief.

000766

-8-

b.

Abitibi, or its predecessors, owned and operated a pulp and paper mill
at Grand Falls-Windsor. As a result of the Abitibi Act, Abitibi is a
previous owner of the site and of the contaminants.

c.

Abitibi is the current owner of the Stephenville site, on which a pulp


and paper mill was operated.

d.

Similarly, Abitibi is the current owner of the Botwood site, which was
the location of Abitibi's shipping operations, is the current owner of
some of the logging camps sites and a previous owner of the other ..
logging camp sites.

30.

Abitibi's obligations to remedy environmental contamination on the Abitibi


Sites, therefore, are the result of the application of the EPA, as well as the
Compliance Schedule and various Certificates of Approval issued with
respect to many of the sties, which encapsulate both provincial and federal
statutory obligations.

31.

Abitibi does not dispute that the Abitibi Sites are heavily contaminated, nor
does it quarrel with the fact that at least some of this contamination is the
result of its operations in the Province. Abitibi's objection lies in the price tag
for eliminating the contaminants from the environment - over $1 00 million
according to the evidence presented by Abitibi at the motion - and of its
perceived inability to comply with the EPA Orders.

32.

Yet, Abitibi's own witness confirmed at the hearing of the Province's motion
that:
a.

Abitibi possessed sophisticated human resources dedicated to


environmental compliance and experienced in environmental
remediation in the Province;

b.

Abitibi took its environmental obligations seriously and, therefore, by


the time the EPA Orders were issued, it was or should have been in a
position to comply with a substantial portion of the orders; and

c.

Abitibi and the Province had previously benefitted from a co-operative


relationship, and there was no reason to think that Abitibi could not
get extensions and other allowances it needed to comply with the
EPA Orders, since it had always been able to do so in the past.

000767

- 9-

33.

At the hearing, the witness for the Province confirmed that it was willing to
enter into discussion with Abitibi to work out how best to achieve the goals of
the EPA Orders. An affidavit sworn by Donna Ballard in support of the
Province's Motion, which supports this proposition, is attached hereto at Tab
B-1 of the Supporting Documents Brief. However, Abitibi has rejected the
possibility of such discussions. Abitibi just does not want to comply with the
EPA Orders, now or in the future.

34.

The CPO which Abitibi obtained from the CCAA Court has the effect of
barring and extinguishing Abitibi's duty to comply with the EPA Orders. As a
consequence of the terms of the CPO, the only power that is left open to the
Minister under the EPA is the power found under s. 102 of EPA to spend the
Province's own money on fulfilling Abitibi's obligations and then to claim as a
creditor against the Company for the costs so incurred. But the Minister
wants Abitibi to remediate lands that Abitibi is responsible under the EPA for
remediating. That is why the Minister issued the EPA Orders in the first
place.

35.

The gravamen of the Province's motion was that the CCAA Court lacks the
statutory power and, ultimately, the constitutional competence to make an
order that bars and extinguishes Abitibi's obligation to comply with the EPA
Orders and thereby to leave to the Minister only the residual power available
to her under s. 102 of the EPA to cause the Province to spend its money
fulfilling Abitibi's statutory obligations. For this reason, the Province argued
that the CCAA Court is required to ensure that any plan of compromise and
arrangement that Abitibi puts forth for court approval makes provision for
compliance with the EPA Orders.

36.

Although there was evidence that the costs that Abitibi estimates it might
have to incur to fulfil its remediation obligations in the Province might be
"material" to Abitibi's ability successfully to restructure, there was no
evidence that Abitibi would be unable to agree a remediation plan with the
Province and incorporate the terms of the remediation plan into its plan of
compromise and arrangement under the CCAA. Nor was there any evidence
that Abitibi's creditors would vote against a plan that makes provision for
environmental remediation.

37.

Moreover, the CCAA Court was not provided with any evidence of Abitibi's
projected future cash flows from its restructured business operations to
enable the court to make a informed evaluation about the degree to which
the remediation costs are, in fact, "material" to anything Abitibi wishes to do.
The complete absence of evidence from Abitibi on this point, and the
complete lack of detail in the Monitor's report, is strongly suggestive of the

000768

Page 1 of 1

5.21 (1 )(b)
Vanstone, Melanie
From:

John. 0' Neill@international.gc.ca

Sent:

May 3, 2010 12:22 PM

To:

Sargent, Timothy; Emmanuei.Kamarianakis@international.gc.ca; sylvie.tabet@internationaf.ge.c<


Christophe. Bondy@international.gc.ca; Carol. Nelder-Corvari@fin .gc.ca; Jim. Haley@fi n.gc. ea; Jo
Vanstone, Melanie; Graham.Fiack@fin.gc.ca; Denis.Gauthier@fin.gc.ca; Richard.Botham@fin.ge
Cynthia.Bernier@international.gc.ca; Raphaelle.Lapierre-Houssian@international.gc.ca;
Aladin.Legaultd'Auteuil@international.gc.ca; IMCEAX400c=CA+3Ba=GOVMT+2ECANADA+3Bp=GC+2BNRCAN+2ERNCAN+3Bs=Booth+3Bg=Darcie+3
IMCEAX400c=CA+3Ba=GOVMT+2ECANADA+3Bp=GC+2BNRCAN+2ERNCAN+3Bs=Farreii+3Bg=Jim+3B
IMCEAX400.
c=CA+3Ba=GOVMT+2ECANADA+3Bp=GC+2BNRCAN+2ERNCAN+3Bs=Rosser+3Bg=Tom+3E

Subject:

Abitibi

Attachments: scan0001.pdf

John O'Neill
Director 1 Directeur
Investment Trade Policy 1 Politique commerciale sur l'investissement (TBI)
Foreign Affairs and International Trade Canada 1 Affaires etrangeres et Commerce international Canada
Government of Canada 1Gouvernement du Canada
Tel: 613 944-2427

2010-10-28

000769

Page 770
is withheld pursuant to sections
est retenue en vertu des articles

14, 20(1)(c), 21(1)(b), 21(1)(c)

of the Access to Information Act


de la Acces

a l'information

Page 771
is withheld pursuant to sections
est retenue en vertu des articles

14, 19(1), 20(1)(c), 21(1)(b), 21(1)(c)

of the Access to Information Act


de la Acces

a l'information

5.14

Page 1 of2

5.20(1 )(b)

Gilbert, Anne
From:

Cynthia.Bernier@international.gc.ca

Sent:

May 3, 2010 12:18 PM

To:

Gilbert, Anne

5.21 (1 )(b)

Subject: FW: Abitibi's assessment of the CRA report

For you.
From: O'Neill, John -TBI
Sent: December 22, 2009 4:07PM
To: Levesque, Louis -DMT; Tabet1 Sylvie -JLTB; Kamarianakis, Emmanuel -DMT
Cc: Bernier, Cynthia -TBI; Lapierre-Houssian, Raphaelle -TBI
Subject: Abitibi's assessment of the CRA report

2010-05-03

000772

Page 2 of2

5.20(1 )(b)
5.21 (1 )(b)
John O'Neill
Director 1 Directeur
Investment Trade Policy 1 Politique commerciale sur l'investissement (TBI)
Foreign Affairs and International Trade Canada I Affaires etrangeres et Commerce international Canada
Government of Canada 1 Gouvernement du Canada
Tel: 613 944-2427

2010-05-03

000773

Gilbert, Anne
From:
Sent:
To:
Cc:
Subject:

Cynthia.Bernier@internationa! .gc.ca
May 3, 2010 1:19PM
Gilbert, Anne
Raphaelle.Lapierre-Houssian@international.gc.ca;
A! ad in .Legaultd'Auteuil@internationa! .gc.ca; John. O'Neill@international.gc.ca
FW: AbitibiBowater's restructuring at risk by N.L. environmental claims: ...

5.14

-----original Message----From: Bernier, Cynthia -TBI


Sent: February 23, 2010 7:01 PM
To: Bernier, Cynthia -TBI
Subject: FW: AbitibiBowaters restructuring at risk by N.L. environmental claims: ...
AbitibiBowaters restructuring at risk by N.L. environmental claims: monitor
(AbitibiBowater)
Source: CP - The Canadian Press
Feb 23 16:24

5.21 (1 )(b

/I

000774

The company may not be able to obtain financing and the restructuring process, now into
its lOth month, will likely become more complicated and delayed.
It would also shift the value away from the creditors in favour of the province, something
AbitibiBowater says would not be consistent with the legislation.
Ernst & Young said the environmental orders would compel the company to spend lots of
money to remediate properties it no longer owns, doesn't use or which have little or no
net value.
The monitor warned the outcome could also have far-reaching consequences for other large
restructurings involving pot.ential environmental obligations.
AbitibiBowater spokesman Jean-Philippe Cote said the company is trying exit court
protection ''as much as possible in the early side of this year.''
AbitibiBowater has filed notice of its intent to seek more than $300 million from the
province under the North American Free Trade Agreement resulting from Newfoundland's 2008
expropriation of its last remaining operating mill in the province.
Newfoundland Premier Danny Williams has said there's ''a real possibility'' that province
won't have to pay anything once environmental cleanup and $40 million in severance costs
are factored.
Meanwhile, the monitor said AbitibiBowater is in advanced discussions with a prospective
buyer for an idled pulp and paper mill and two closed sawmills in MacKenzie, B.C.
AbitibiBowater is also looking to sell three closed mills in Quebec. The mills in
Roberval, Saint-Fulgence and Lebel-sur-Quevillon have been closed since last year.
North America's largest newsprint producer filed for court protection from creditors last
April in Canada and the United States.
Market conditions have also forced rivals such as Kruger Inc. to extend the shutdown of
its coated paper machine at the Wayagamack mill in Trois-Rivieres, Que., for five more
weeks. The mill had been slated to restart on Tuesday after being idled for nearly two
months.
Formed by the 2007 merger of Canadian and U.S. newsprint companies, AbitibiBowater
produces newsprint, commercial printing papers, market pulp and wood products.
The company operates 23 pulp and paper mills and 30 wood products operations in the united
States, Canada, the United Kingdom and South Korea.
INDEX: FORESTRY ENVIRONMENT BUSINESS JUSTICE POLITICS

--------------------------------------------------------------------------------

Received Id 20100223B2966A on Feb 23 2010 16:24-----0riginal Message----From: Bissonnette, Annie -CMC


Sent: February 23, 2010 5:42 PM
To: Bernier, Cynthia -TBI; O'Neill, John -TBI; Lapierre-Houssian, Raphaelle -TBI
Cc: Chabot-Racine, Line -CMC
Subject: TR: AbitibiBowater's restructuring at risk by N.L. environmental claims: ...
FYI.

s.68(a)

000775

Page 776
is withheld pursuant to section
est retenue en vertu de l'article

68(a)

of the Access to Information Act


de la Acces

a l'information

Page 1 of4

Smith, Robert
From:

Hill, Patrick

Sent:

May 3, 2010 9:39AM

To:

'sylvie.tabet@international.gc.ca'

Cc:

Smith, Robert; Gilbert, Anne

Subject:

FW:

5.23

Attachments:
Dear Sylvie -

Many thanks

Patrick Hill
Assistant Director 1 Directeur adjoint
Legal Operations 1 Operations juridiques/conseillers
Privy Council Office 1 Bureau du Conseil Prive
Ottawa, Canada K1A OA3
patrick.hill@pco-bcp.gc.ca
Telephone 1 Telephone 613-957-5777
Facsimile 1 Telecopieur 613-957-5032
Government of Canada 1 Gouvernement du Canada
From: Rambod.Behboodi@fin.gc.ca [mailto:Rambod.Behboodi@fin.gc.ca]

Sent: April 30, 2010 6:01 PM


To: Hill, Patrick; Kate.Thompson@fin.gc.ca
Cc: Smith, Robert; Gilbert, Anne; Vanstone, Melanie
Subject: I

5.23

Dear Patrick

Rambod Behboodi
General Counsel and Executive Director I Avocat general et Directeur executif
General Legal Services I Services juridiques generaux
Department of Finance Canada I Ministc~re des Finances Canada
Ottawa, Canada K1A OGS

2010-12-10

000777

Page 2 of4
!_~D;lb<:~Q_. behbo~~gi@fin.ge.<;:_!!

Telephone I Telephone 613 995 8724 I Facsimile I Telecopieur 613 944 5566
Teleunprimeur 613--995--1455 I Blackberry 613 894 5543
Government of Canada

I Teletypewriter

I Gouvernement du Canada

From: Hill,, Patrick [mailto:Patrick.Hill@pco-bcp.gc.ca]

Sent: Wednesday, April 28, 2010 11:49 AM


To: Behboodi, Rambod; Thompson, Kate
Cc: Smith, Robert; Gilbert, Anne; Vanstone, Melanie
Subject:,

5.23

Dear Rambod and Kate -

2010-12-10

000778

s.23

Page 3 of4

Best regards,

Patrick Hill
Assistant Director 1 Directeur adjoint
Legal Operations 1 Operations juridiques/conseillers
Privy Council Office 1 Bureau du Conseil Prive
Ottawa, Canada K1A OA3

2010-12-10

000779

Page 4 of4

patrick. hill@pco-bcp.gc.ca
Telephone 1 Telephone 613-957-5777
Facsimile 1 Telecopieur 613-957-5032
Government of Canada 1 Gouvernement du Canada

2010-12-10

000780

1+1

Department of Justice
Canada

Ministere de la Justice
Canada

Security classification -Cote de securite

SECRET
File number- Numero de dossier

MEMORANDUM/NOTE DE SERVICE
General Legal Services
Department of Finance
L'Esplanade Laurier
21st Floor, East Tower
140 O'Connor Street
Ottawa, Ontario K1A OG5
Facsimile: 613-995-7223

Services juridiques glmeraux


Ministere des Finances
L'Esplanade Laurier
21 e etage, tour est
140, rue O'Connor
Ottawa (Ontario) K1A OG5
Telecopieur: 613-995-7223

Date

April 30, 20 I 0
OriginatorfTelephone number- Auteur/Numero de telephone

Kate Thompson
TOlD EST.:

Patrick Hill, Assistant Director, Legal Operations, Privy Counsel Office

FROM/ORIG.:

Rambod Behboodi, General Counsel and Executive Director, General Legal


Services, Law Branch, Finance Canada

SUBJECT/OBJET:

5.14

5.23

Comments/Remarques

000781

Pages 782 to I

a 791

are withheld pursuant to sections


sont retenues en vertu des articles

14,23

of the Access to Information Act


de la Acces

a l'information

SECRET

- 12-

Comments/Remarques

5.23

5.19(1)

~ Rimbod Behboo9J

000792

Page 1 of4

Smith, Robert
From:

Gilbert, Anne

Sent:

May 3, 2010 10:06 AM

To:

Hill, Patrick

Cc:

Smith, Robert

5.23

Subject:
Robert and I will call you.

From: Hill, Patrick

Sent: May 3, 2010 10:02 AM


To: Gilbert, Anne
Cc: Smith, Robert

Subject:

Patrick Hill
Assistant Director 1 Directeur adjoint
Legal Operations 1 Operations juridiques/conseillers
Privy Council Office 1 Bureau du Conseil Prive
Ottawa, Canada K1A OA3
patrick.hill@pco-bcp.gc.ca
Telephone 1 Telephone 613-957-5777
Facsimile 1 Telecopieur 613-957-5032
Government of Canada 1 Gouvernement du Canada
From: Gilbert, Anne

Sent: May 3, 2010 9:59AM


To: Hill, Patrick
Cc: Smith, Robert

Subject:
Patrick,

An ne

From: Hill, Patrick

Sent: May 3, 2010 9:39AM


To: 'sylvie. tabet@ international.gc.ca'
Cc: Smith, Robert; Gilbert, Anne

Subject: I

2010-12-10

000793

s.23

Page 2 of 4

Dear Sylvie -

Many thanks

Patrick Hill
Assistant Director 1 Directeur adjoint
Legal Operations 1 Operations juridiques/conseillers
Privy Council Office 1 Bureau du Conseil Prive
Ottawa, Canada K1A OA3

Telephone 1 TeiEphone 613-957-5777


Facsimile 1 TeleGopieur 613-957-5032
Government of Canada 1 Gouvernement du Canada
From: Rambod.Behboodi@fin.gc.ca [mailto:Rambod.Behboodi@fin.gc.ca]

Sent: April 30, 2010 6:01 PM


To: Hill, Patrick; Kate.Thompson@fin.gc.ca
Cc: Smith, Robert; Gilbert, Anne; Vanstone, Melanie
Subject:
-

Dear Patrick

Rambod Behboodi
General Counsel and Executive Director I Avocat general et Directeur executif
General Legal Services I Services juridiques generaux
Department of Finance Canada I Ministere des Finances Canada
Ottawa, Canada K1A OGS
rambod.behboodi@fm.gc.ca
Telephone I Telephone 613 995 8724 / Facsimile I Telccopieur 613 944 5566 I 'I'eletypewriter
Tcle.imprimeur 613-995-1455 I Blackberry 613 894 5543
Government of Canada

I Gouvernement du Canada

From: Hill, Patrick [mailto:Patrick.Hill@pco-bcp.gc.ca]

2010-12-10

000794

Page 3 of4
Sent: Wednesday, April 28, 2010 11:49 AM
To: Behboodi, Rambod; Thompson, Kate

5.23

Cc: Smith, Robert; Gilbert, Anne; Vanstone, Melanie

Subject:
Dear Rambod and Kate -

2010-12-10

000795

s.23

Page 4 of4

Best regards,

Patrick Hill
Assistant Director 1 Directeur adjoint
Legal Operations 1 Operations juridiques/conseillers
Privy Council Office 1 Bureau du Conseil Prive
Ottawa, Canada K1A OA3

ru!1ric1<_,hili@R-e_o::.l2cQ"gg_,ga
Telephone 1 Telephone 613-957-5777
Facsimile 1 Telecopieur 613-957-5032
Government of Canada 1 Gouvernement du Canada

2010-12-10

000796

Vanstone, Melanie

Subject:

Vanstone, Melanie
May 4, 2010 12:49 P!\11
'Darcie.Booth@NRCan-RNCan.gc.ca'; 'Philippe.Hall@fin.gc.ca'
FW: Draft TOR re AB

Attachments:

AB Annex A. doe

From:
Sent:

To:

AB Annex A.doc

s.21 (1 )(b)

(34 KB)

Darcie, Philippe,
Here are my initial comments on the draft.
I will also do some further consulting on my
end with those involved in the previous cases where we did this kind of analysis.

Thanks
Melanie Vanstone
melanie.vanstone@pco-bcp.gc.ca
613-957-5447
-----Original Message----From: Booth, Darcie [mailto:Darcie.Booth@NRCan-RNCan.gc.ca]
Sent: May 4, 2010 12:12 PM
To: Vanstone, Melanie; Philippe.Hall@fin.gc.ca
Subject: Draft TOR re AB

s.21 (1 )(b)

Darcie Booth
***************************************************
Darcie Booth
dbooth@nrcan.gc.ca, (613) 947-9051 or (613) 990-6363 facsimile I telecopieur (613)
998-7343 Director, EAD/PEIB /Directrice, DAE/DPEI Canadian Forest Service, Natural
Resources Canada/ Service canadien des forets, Ressources naturelles Canada, Mailing
address: 580 Booth Street, Ottawa, Ontario KlA OE4 Office location: 2934 Baseline Road,
Ottawa, Room 5B8
***************************************************

000797

Annex A - Statement of Work


AbitibiBowater is Canada's largest forest company and the world's largest producer of
newsprint. it has numerous pulp, paper and sawmills in 5 provinces as well as
operations across the United States. it has been in bankruptcy protection in both
Canada and the US since April of 2009. Approximately 65 percent of the company's
capacity and revenues, as well as 70 percent of its employees are in Canada.

The Government of Canada (GoC) received a proposal from AbitibiBowater under the

auspices of the of the consultation process forJt~..F.J~jl_l!p~g~iP.?~~h~PQo.~:. . t.t~~~-r-~~.a.Pt.~.r...U __ ,---


ofNAFTA. The company proposed
---with a ten vear term at concessional rates to support its exit from bankruptcy protectiol'\.... p
ln exchange. the companv~Quld settle its NAFlA claim.
The GoC is in discussions with AbitibiBowater and is considering options
As part of this process the GoC is seeking to determine the viabilitv
q.Lth~.. t;.9.m.Pi!Q.Y:~.P!J..~.iD~~-~.Ph\D...,.
~m.s:L.g~n~:r..i.!JJy,_~Y.h9..0J~rth<:;_..c;_Q.nJPi!nY.i~.iD..i.!.l?.P.~.it..i.PntQ.mi.!i.nti.!.injJs.9..!L(.l5. .i.!. gQing_9.QD.g9.JD.,

s.21 (1 )(c)

The work will be carried out in two phases.


1) Phase 1 -a critical review of the Company's Business Plan (originally presented
November 2009 and partially updated April2010) including the restructuring
update presentation to the GoC of April23, 2010, and the revised financial plan
referred to on the cover page of the business plan.
This will include:
1. an assessment of the appropriateness of the assumptions used and whether there is
a reasonable basis for their use in the forecast period.
2. identification of key issues and risks in the Company's business plan and
restructuring update
3. a report on the above to be provided by May 14, 2010.
2) Phase 2- A due diligence assessment of the company and its restructuring plan,. ..

To the extent that information is made available by the company, the Contractor is
to conduct a thorough due diligence review of the current and prospective
fmancial position of AB and any other corporate entities as appropriate. The
contractor will review the current and future financial position of AB as per the
plans submitted to the GoC and any new information provided by the company in
the process of subsequent fact finding by the contractor. This will include an
assessment of AB's current liquidity position and projections for the subsequent
five years, an analysis of AB's current and future cash flow projections and key
assumptions including revenue,.~?i:P~J1St)pt11~~ 4~~)tpr~pay~"!li;;!!! !l~~li!EP~~~Il~:
.... -_.. .-- {_o_e_let_e_d_:_an_d_ _ _ _ _ _ _.

The Contractor will :

000798

Assess the procedures used to prepare the prospective financial information, checking
mathematical accuracy and highlight any significant noteworthy accounting policies.
Assess the appropriateness of the assumptions underlying prospective information with
historical results, considering whether the assumptions are reasonable and complete and
identify implied or unstated assumptions
Provide comments on issues identified by the Contractor (including comments on
assumptions considered either at risk or not being achieved or unlikely to be achieved)
and quantifying and aggregating the impact thereof.
The contractor may also be asked to conduct further analysis on other plans that may be
presented by the company or additional analysis as requested.
Deliverables:
Phase I:
As a result of the work performed above, the Contractor must provide a final Report on
Phase I by COB May 14.
Phase 2:
As a result of the work performed above, the Contractor must provide a final Report on
Phase 2 by COB May 30. This will indude a liquidity analysis template and detailed
financial analysis template in Excel.

000799

Vanstone, Melania
From:
Sent:
To:
Subject:

Vanstone, Melanie
May 4, 2010 12:51 PM
Diogo, Brigitte
FW: Draft TOR re AB

Attachments:

AB Annex A.doc

AB Annex A.doc
(34 KB)

Hi Brigitte

Attached is a draft of the terms of reference to hire an outside expert to review AB's
business plan. My comments are in track changes. Let me know if you have comments, in
particular as you are familiar with the previous cases.
Do you know if there would even
be a copy of the AC or autos contract in our files? Thanks
Melanie Vanstone
melanie.vanstone@pco-bcp.gc.ca
613-957-5447
-----Original Message----From: Booth, Darcie [mailto:Darcie.Booth@NRCan-RNCan.gc.ca]
Sent: May 4, 2010 12:12 PM
To: Vanstone, Melanie; Philippe.Hall@fin.gc.ca
Subject: Draft TOR re AB

5.21 (1 )(b)

Darcie Booth
***************************************************
Darcie Booth
dbooth@nrcan.gc.ca, (613) 947-9051 or (613) 990-6363 facsimile I telecopieur (613)
998-7343 Director, EAD/PEIB /Directrice, DAE/DPEI Canadian Forest Service, Natural
Resources Canada/ Service canadien des forets, Ressources naturelles Canada, Mailing
address: 580 Booth Street, Ottawa, Ontario K1A OE4 Office location: 2934 Baseline Road,
Ottawa, Room 5B8
***************************************************

000800

Page 1 of5
5.14
Gilbert, Anne
From:

Hill, Patrick

Sent:

May 4, 2010 10:49 AM

To:

'sylvie.tabet@international.gc.ca'

Cc:

Smith, Robert; Gilbert, Anne; Vanstone, Melania

5.23

Subject:

Patrick Hill
Assistant Director I Directeur adjoint
Legal Operations I Operations juridiques/conseillers
Privy Council Office 1 Bureau du Conseil Prive
Ottawa, Canada K1A OA3

.P9.tr.ic.k..b.i.IJ.@P..G.O.:.P.C.P... 9.C..,.C.9
Telephone 1 Telephone 613-957-5777
Facsimile 1 Telecopieur 613-957-5032
Government of Canada 1 Gouvernement du Canada
From: sylvie.tabet@international.gc.ca [mailto:sylvie.tabet@international.gc.ca]

Sent: May 3, 2010 11:15 PM


To: Hill, Patrick

Cc: Smith, Robert; Gilbert, Anne


Subject: I

r..~. .

''f

Sylvie T abet

2010-05-04

000801

s.23

Page 2 of5

From: Hill, Patrick <Patrick.Hill@pco-bcp.gc.ca>


To: Tabet, Sylvie -JLTB
Cc: Smith, Robert <Robert.Smith@pco-bcp.gc.ca>; Gilbert, Anne <Anne.Gilbert@pco-bcp.gc.ca>
Sent: Mon May 03 09:38:45 2010
Subject: F
Dear Sylvie -

Many thanks

Patrick Hill
Assistant Director 1 Directeur ad joint
Legal Operations 1 Operations juridiques/conseillers
Privy Council Office 1 Bureau du Conseil Prive
Ottawa, Canada K1A OA3
patrick.hill@pco-bcp.gc.ca
Telephone 1 Telephone 613-957-5777
Facsimile 1 Telecopieur 613-957-5032
Government of Canada I Gouvernement du Canada
From: Rambod.Behboodi@fin.gc.ca [mailto:Rambod.Behboodi@fin.gc.ca]

Sent: April 30, 2010 6:01 PM


To: Hill, Patrick; Kate.Thompson@fin.gc.ca
Cc: Smith, Robert; Gilbert, Anne; Vanstone, Melanie
Subject:

Dear Patrick

Rambod Behboodi
General Counsel and Executive Director I Avocat general et Directeur executif
General Legal SeiVices I SeiVices juridiques generaux
Department of Finance Canada I Mi.nistere des Finances Canada
Ottawa, Canada K lA OGS
rambod.behboodi@ fin.gc.ca
Telephone I Telephone 613 995 8724 I Facsimile I Telecopieur 613 944 5566 I Teletypewriter
Teleimprimeur613-995-1455 I Blackberry613 894 5543

2010-05-04

000802

Page 3 of5
s.23
Government of Canada

I Gouvemement du Canada

From: Hill, Patrick [mailto:Patrick.Hill@pco-bcp.gc.ca]

Sent: Wednesday, April28, 2010 11:49 AM


To: Behboodi, Rambod; Thompson, Kate
Cc: Smith, Robert; Gilbert, Anne; Vanstone, Melanie
Subject:
Dear Rambod and Kate -

2010-05-04

000803

s.23

Page 4 of5

Best regards,

Patrick Hill
Assistant Director 1 Directeur adjoint
Legal Operations 1 Operations juridiques/conseillers
Privy Council Office 1 Bureau du Conseil Prive
Ottawa, Canada K1A OA3
patrick.hill@pco-bcp.gc.ca .
Telephone 1 Telephone 613-957-5777
Facsimile 1 Telecopieur 613-957-5032

2010-05-04

000804

Page 5 of5

Government of Canada 1 Gouvernement du Canada

2010-05-04

000805

Page 1 of7

5.23
Gilbert, Anne
From:

Mark.Taggart@ic.gc.ca

Sent:

May 4, 201 0 4:36 PM

To:

sylvie.tabet@international.gc.ca; Gilbert, Anne

Cc:

Garry.Wetzel@ic.gc.ca

5.14
5.21 (1 )(b)

5.23

Subject:

From: sylvie.tabet@international.gc.ca [mailto:sylvie.tabet@international.gc.ca]

Sent: Tuesday, May 4, 2010 4:22PM


To: Taggart, Mark: LEG-DROIT

Subject:
Mark, can you provide Anne the answers to her questions?
From: Gilbert, Anne [mailto:Anne.Gilbert@pco-bcp.gc.ca]

Sent: May 4, 2010 4:10 PM


To: Tabet, Sylvie -JLTB
Cc: Bernier, Cynthia -TBI

Subject:
Sylvie,

Thanks,
An ne

From: sylvie.tabet@international.gc.ca [mailto:sylvie.tabet@international.gc.ca]

Sent: May 3, 2010 9:39 PM


To: Gilbert, Anne
Cc: Cynthia.Bernier@international.gc.ca; Metrk.Taggart@ic.gc.ca; John.O'Neill@international.gc.ca

Subject:

2010-05-04

000806

s.14
5.23

Page 2 of7

Sylvie

From: Gilbert, Anne <Anne.Gilbert@pco-bcp.gc.ca>


To: Tabet, Sylvie -JLTB
Cc: Bernier, Cynthia -TBI
Sent: Man May 03 19:35:08 2010
Subject: RE: AbitibiBol/l,later's restructuring at risk by N.L. environmental claims: ...
Sylvie, Cynthia
Below is my effort to briefly summarize the March 31, 2010 ruling by the PQ Superior Court. I would appreciate if
you could take a look and provide and suggested clarifications.

Thanks,
An ne

2010-05-04

000807

5.14

Page 3 of7

5.23

From: sylvie.tabet@international.gc.ca [mailto:sylvie.tabet@international.gc.ca]

Sent: May 3, 2010 4:01 PM


To: Cynthia.Bernier@international.gc.ca; Gilbert, Anne

Subject:
I doubt they have or intend to but I will check. Also I don't think the award is entirely clear that such an extension
would be granted.
Sylvie

From: Bernier, Cynthia -TBI

Sent: May 3, 2010 3:42 PM


To: 'Gilbert, Anne'
Cc: Tabet, Sylvie -JLTB

Subject:

From: Gilbert, Anne [mailto:Anne.Gilbert@pco-bcp.gc.ca]

Sent: May 3, 2010 3:41PM


To: Bernier, Cynthia -TBI
Subject: I

From: Cynthia.Bernier@international.gc.ca [mailto:Cynthia.Bernier@international.gc.ca]

Sent: May 3, 2010 3:16 PM


To: Gilbert, Anne

Subject:

The file is too big, but here is the link: http://documentcentre.eycan.com/eycm library/Project%
.70A:t:!.4.i.!.E.P.:gl.i..~.h!.\=._q_!:I.rto/.<:>.

200rders/JudgmentNewfoundlandMotionforDeclaration31 Mar20 1OENG .pdf


From: Bernier, Cynthia -TBI

Sent: May 3, 2010 3:14 PM


To: 'Gilbert, Anne'
Cc: O'Neill, John -TBI; Tabet, Sylvie -JLTB; Wylie, Michael -TBI; Legault d' Auteuil, Aladin -TBI; LapierreHoussian, Raphaelle -TBI; Boamah, Gerald -TBI

Subject:

Here you go.

2010-05-04

000808

s.14

Page 4 of7

s.23
Cynthia

Cynthia Bernier

---------

Deputy Director 1 Directrice adjointe


Investment Trade Policy Division 1 Direction de la Politique commerciale sur l'investissement
Email 1 Courriel : cynthia.bernier@international.gc.ca
Telephone 1 Telephone: 613-992-2299
Facsimile 1 Telecopieur: 613-944-0679
125, promenade Sussex Drive, Ottawa (Ontario) K1A OG2
Foreign Affairs and International Trade Canada I Affaires etrangeres et Commerce international Canada
Government of Canada 1 Gouvernement .du Canada

.1+1

~~~~~=~~r~~Canada ~~~~~=~~nwCanada.

(!)

Avez-vous vraiment besoin d'imprimer ce message?


Before printing this e-mail think if it is necessary

From: Gilbert, Anne [mailto:Anne.Gilbert@pco-bcp.gc.ca]

Sent: May 3, 2010 2:58 PM


To: Bernier, Cynthia -TBI

Subject:
Thanks again.

From: Cynthia.Bernier@international.gc.ca [mailto:Cynthia.Bernier@international.gc.ca]

Sent: May 3, 2010 2:51 PM


To: Gilbert, Anne
Cc: Raphaelle.Lapierre-Houssian@international.gc.ca; John.O'Neill@international.gc.ca;
Aladin.Legaultd'Auteuil@international.gc.ca; Michaei.Wylie@international.gc.ca

Subject:

Newfoundland to appeal Quebec court's ruling absolving AbitibiBowater of cleanup costs

T:HE CANADIAN PRESS 'll


April29, 2010 7:21 a.m.
Be the first to comment
Print article
Text size
ST. JOHN'S, N.L.- The Newfoundland and Labrador government and AbitibiBowater will be back in
court May 12 as the province tries to have the company declared legally responsible for enviromnental
remediatiop in central Newfoundland.
The province has already lost two cases against AbitibiBowater in Quebec courts since it expropriated
the company's assets in Grand Falls-Windsor, but it will try to win on appeal.

2010-05-04

000809

Page 5 of7

Opposition Liberal Leader Yvonne Jones could not get information in the legislature Wednesday when
she asked how much the cases cost taxpayers after the province was ordered to pay court costs.
Environment Minister Charlene Johnson instead maintained the company has a year to submit a
remediation plan.
She says the province's Environmental Protection Act is clearly based on the principle of the polluter
pays.
The province also says it's not responsible for the cost of outstanding payments to contractors who did
work for AbitibiBowater.

-----Original Message----From: Gilbert, Anne [m~iltQ_;}..nn~J:J.ilb.~r.l@P.~Q-~_b.P..P.J~.\1.,.9.!!]


Sent: May 3, 2010 2:45PM
To: Bemier, Cynthia-TBI
Subject::
Thanks, Cynthia.

5.21 (1 )(b)

-----Original Message----From: Cynthia.Bemier@intemational.gc.ca [n:l.~iHQ.;.Cynthi~J}~.mi~r.@in.t~nll!ti9.tl<!L.g.G_,_Q!]


Sent: May 3, 2010 1:19PM
To: Gilbert, Anne
Cc: Raphaelle.Lapierre-Houssian@intemational.gc.ca; Aladin.Legaultd'Auteuil@intemational.gc.ca;
John.O'Neill@intemational.gc.ca
Subject: 1

-----Original Message----From: Bemier, Cynthia-TBI


Sent: Februar)r 23, 2010 7:01 PM
To: Bemier, Cynthia-TBI
Subject: 1

s.68(a)
AbitibiBowater's restructuring at risk by N.L. environmental claims: monitor (AbitibiBowater)
Source: CP - The Canadian Press
Feb 23 16:24

2010-05-04

000810

Pages 811 to I

a 812

are withheld pursuant to section


sont retenues en vertu de l'article

68(a)

of the Access to Information Act


de la Acces

a l'information

Page 1 of 1

Gilbert, Anne
From:

Gilbert, Anne [Anne.Gilbert@pco-bcp.gc.ca]

Sent:

May 4, 2010 6:02 PM

To:

Gilbert, Anne

Subject:

FW: Abitibi-Bowater - update

Attachments: Presentation to the Government of Canada.pdf

From: Vanstone, Melanie

Sent: April30, 2010 5:19PM


To: Gilbert, Anne
Subject: FW: Abitibi-Bowater- update
The plan. Sorry for the delay

2010-12-06

000813

Pages 814 to I

a 867

are withheld pursuant to sections


sont retenues en vertu des articles

20(1 )(b), 20(1 )(c)

of the Access to Information Act


de la Acces

a l'information

Page 1 of7
5.23
Smith, Robert
From:

Gilbert, Anne

Sent:

May 4, 2010 10:13 AM

To:

Smith, Robert

Subject:
Robert,
FYI- below are comments from DFAIT. I have taken them into account in my latest version

From: Mark.Taggart@ic.gc.ca [mailto:Mark.Taggart@ic.gc.ca]


Sent: May 4, 2010 9:59 AM
To: Cynthia.Bernier@international.gc.ca; sylvie.tabet@international.gc.ca; Gilbert, Anne
Cc: John.O'Neill@international.gc.ca; Garry.Wetzel@ic.gc.ca
Subject:
Good morning everyone.

Thanks
Mark

From: Cynthia.Bernier@international.gc.ca [mailto:Cynthia.Bernier@international.gc.ca]


Sent: Tuesday, May 4, 2010 8:08AM
To: sylvie.tabet@international.gc.ca; Anne.Gilbert@pco-bcp.gc.ca
Cc: Taggart, Mark: LEG-DROIT; John.O'Neill@international.gc.ca
Subject:

HiAnne,

2010-12-10

000868

Pages 869 to I

a 870

are withheld pursuant to sections


sont retenues en vertu des articles

20(1 )(d), 21 (1 )(c)

of the Access to Information Act


de la Acces

a l'information

. 1+1

lnfoXpress:

To:

5.19(1)

Government of Canada Gouvernement du Canada


Bureau du Conseil prive
Privy Council Office

CIMS: 201 0-IGA-00461


Folder: 733276

528122

Date:

Natasha Rascanin

MAY - 5 2010

MEMORANDUM FOR SERGE DUPONT I NOTE A L'INTENTION DE SERGE DUPONT


Subject:

QUEBEC'S SUPERIOR COURT RULING


REGARDING REMEDIATION OF ABITIBIBOWATER SITES
VERSIONS:
Fro

~raham

Swan

Via

Dvour signature

Information

Votre signature

0 For comments

D For decision
Pour decision

Pour commentaires

Material for the PM


Materiel pour le PM
COMMENTS:

CONSULTATION:

IGA/AIG

o SA/AS
XSPRIPSR

o COMMS

OTHERPCO/
AUTRE BCP
o SD/DS
X ERDP/PDER
oP&P
o LSMP/SLPM
o PCO/BCP COM
o MOG/AG.
o Leg. Couns./Ops Jur.
o Dem. Ref/Ref Dem
o F & DP/ P. E & D

OTHER/AUTRE
X DFAIT

cc:

DISTRIBUTION :

R. Coleman
A. Macleod
N. Rascanin
K. Campbell
P. Aterman

Central File
FPR Officer
Circ Copy

Drafting Officer: Gilbert/dr

::ODMA\PCDOCS\PCO_PROD\528417\ 1

000871

1+1

Government of Canada
Privy Council Office

Gouvernement du Canada
Bureau du Conseil prive

Ottawa, Canada
K1A OA3

SECRET

MEMORANDUM FOR SERGE DUPONT

MAY - 5 2010

5.14

QUEBEC'S SUPERIOR COURT RULING


REGARDING REMEDIATION OF ABITIBIBOWATER SITES
5.21 (1 )(b)
(Information Only)

SUMMARY
0

This note provides additional information on Newfoundland and Labrador's (NL) court action against
AbitibiBowater (AB) pertaining to environmental remediation of its former sites in the province.

In April 2009, the Quebec Superior Court issued an initial order pursuant to the Companies' Creditors
Arrangement Act (CCAA) with respect to AbitibiBowater which placed the company under creditor
protection. A First Stay Extension Order issued in May 2009 included an amendment that the Crown or
its agents could exercise its powers on matters involving public health, safety, security, public order or the
environment, but could not impose monetary fines on the company.

In November 2009, the Newfoundland and Labrador government issued five ministerial orders against AB
pursuant to the NL Environmental Protection Act (EPA). The EPA Orders were in relation to five sites in
the province where the company had carried on industrial activities at different times between 1905 and
2008 (including the expropriated mill in Grand-Falls Windsor). The province also served a Motion
ursuant to the EPA to the Quebec Superior Court (because AB filed for creditor protection in Quebec) in
hich it argued that the ministerial orders were not "creditor claims" under the CCAA, as they do not
equire the company to make payments to the province but rather to comply with its obligations for the
protection of the environment.

lE
0

The ruling by the Quebec Superior Court on March 31, 201 0, dismissed NL's motion and ruled that the
EPA Orders are, in substance, financial or monetary in nature, and are thus prohibited under the
First Stay Extension Order. The province's appeal will be heard on May 12, 2010. In its motion to appeal
the province cites a number of constitutional issues (i.e. the obligation to apply and enforce
constitutionally valid provincial laws).

/)

5.19(1)
Natasna Kascanin
GilberUdr

Canada

000872

Page 1 of5

Gilbert,Anne
From:

Hill, Patrick

Sent:

May 5, 201 0 1:28 PM

To:

'sylvie.tabet@international.gc.ca'

Cc:

Smith, Robert; Gilbert, Anne; Vanstone, Melanie

Subject: I

5.23

Many thanks

Patrick Hill
Assistant Director I Directeur adjoint
Legal Operations 1 Operations juridiques/conseillers
Privy Council Office 1 Bureau du Conseil Prive
Ottawa, Canada K1A OA3

Telephone 1 Telephone 613-957-5777


Facsimile 1 Telecopieur 613-957-5032
Government of Canada .I Gouvernement du Canada
From: sylvie.tabet@international.gc.ca [mailto:sylvie.tabet@international.gc.ca]

Sent: May 4, 2010 10:04 PM


To: Hill, Patrick
Cc: Smith, Robert; Gilbert, Anne; Vanstone, Melanie
Subject: I

5.23

Patrick,

Sylvie Tabet

From: Hill, Patrick <Patrick.Hill@pco-bcp.gc.ca>


To: Tabet, Sylvie -JLTB
Cc: Smith, Robert <Robert.Smith@pco-bcp~gc.ca>; Gilbert, Anne <Anne.Gilbert@pco-bcp.gc.ca>; Vanstone,
Melanie <Melanie.Vanstone@pco-bcp.gc.ca>
Sent: Tue May 0410:48:57 2010
Subject: RE:
5 .23

2010-05-05

000873

Page 2 of5

5.23
Patrick Hill
Assistant Director 1 Directeur adjoint
Legal Operations 1 Operations juridiques/conseillers
Privy Council Office 1 Bureau du Conseil Prive
Ottawa, Canada K1A OA3
patrick. hill@pco-bcp.gc.ca
Telephone 1 Telephone 613-957-5777
Facsimile 1 Telecopieur 613-957-5032
Government of Canada 1 Gouvernement du Canada
From: sylvie.tabet@international.gc.ca [mailto:sylvie.tabet@international.gc.ca]

Sent: May 3, 2010 11:15 PM


To: Hill, Patrick

Cc: Smith, Robert; Gilbert, Anne

Subject:

5.23

Sylvie T abet

From: Hill, Patrick <Patrick.Hill@pco-bcp.gc.ca>


To: Tabet, Sylvie -JLTB

Cc: Smith, Robert <Robert.Smith@pco-bcp.gc.ca>; Gilbert, Anne <Anne.Gilbert@pco-bcp.gc.ca>

Sent: Mon Mav 03 09:38:45 2010


Subject:
Dear Sylvie -

5.23

2010-05-05

000874

Page 3 of5

Many thanks

5.23

Patrick Hill
Assistant Director I Directeur adjoint
Legal Operations I Operations juridiques/conseillers
Privy Council Office 1 Bureau du Conseil Prive
Ottawa, Canada K1A OA3
patrick.hill@pco-bcp.gc.ca
Telephone 1 Telephone 613-957-5777
Facsimile 1 Telecopieur 613-957-5032
Government of Canada I Gouvernement du Canada
From: Rambod.Behboodi@fin.gc.ca [mailto:Rambod.Behboodi@fin.gc.ca]

Sent: April 30, 2010 6:01 PM


To: Hill, Patrick; Kate.Thompson@fin.gc.ca
Cc: Smith, Robert; Gilbert, Anne; Vanstone, Melanie

Subject: 1

5.23

Dear Patrick

Rambod Behboodi
General Counsel and Executive Director I Avocat general et Directeur executif
General Legal Services I Services juridiques generaux
Department of Finance Gmada I Ministere des Finances Canada
Ottawa, Canada K lA OG5
.ml)1_b._od. b~_b._hgpdi@ fip._,gf .ea
Telephone I Telephone 613 995 8724 I Facsimile I Telecopieur 613 944 5566 I Teletypewriter
Teleimprimeur 613-995-1455 I Blackbeny613 894 5543

Govemment of C.anada I Gouvemement du C.anada

From: Hill, Patrick [mailto:Patrick.Hill@pco-bcp.gc.ca]

Sent: Wednesday, April 28, 2010 11:49 AM

5.23

To: Behboodi, Rambod; Thompson, Kate


Cc: Smith, Robert; Gilbert, Anne; Vanstone, Melanie

Subject:

2010-05-05

000875

Page 4 of5
s.23
Dear Rambod and Kate -

2010-05-05

000876

s.23

Page 5 of5

Best regards,

Patrick Hill
Assistant Director I Directeur ad joint
Legal Operations 1 Operations juridiques/conseillers
Privy Council Office 1 Bureau du Conseil Prive
Ottawa, Canada K1A OA3

Telephone 1 Telephone 613-957-5777


Facsimile 1 Telecopieur 613-957-5032
Government of Canada 1 Gouvernement du Canada

2010-05-05

000877

Page 1 of5

Gilbert, Anne
From:

Fitzpatrick, Ron

Sent:

May 5, 2010 4:10PM

To:

Gilbert, Anne

Subject: NFid Ottawa Office

from recent Hansard ...

MR. SPEAKER: The hon. the Opposition House Leader.

MR. KELVIN PARSONS: Thank you, Mr. Speaker.


It is nice to see that the Minister of Education thinks letting $3 million go down the tubes is a bit of
political posturing. It looks like he is not prepared and will not give the people of this Province an
answer. We will find the answer; we will find out why. This is not over yet.

I will move on at this point, Mr. Speaker. The Premier was in Ottawa this week for meetings. While he
was there, we certainly hope he visited suite 1604 on Metcalfe Street, also known as the empty office of
the Province's Ottawa representative, as the empty space is costing the taxpayers of this Province almost
$100,000 a year in rental expenses.
I ask the Premier, the position of the Ottawa representative has been vacant since January: Is there any
necessity to be throwing tax dollars away for the position that has proven to be totally ineffective?

MR. SPEAKER: The hon. the Premier.


SOME HON. MEMBERS: Hear, hear!
PREMIER WILLIAMS: Mr. Speaker, during that trip I really did not have time to put my feet up and
have a cup of coffee in the office, to be quite honest with you. From the time we landed until the time
we left, we were very, very busy. We went through an extremely successful group of meetings.
I met with Minister Strahl with regard to Aboriginal issues and actually dealt with the Innu issue and the
lands claim agreement and facilitated an upcoming meeting between the Innu Nation and the federal
government. That will take place, hopefully, within the next couple of months.
Then, we left there and went to the House of Commons where we were very well-received, favourably
received by all parties in the House of Commons which is very nice. Then proceeded to an in-depth
meeting with the Prime Minister and discussed a broad range of issues commencing with the fisheries,
and the Lower Churchill, and Coast Guard and rescue and a host of issues.
Mr. Speaker, because of his time frames, we then moved on to another meeting and moved to the
meeting with the Minister of ACOA, Keith Ashfield, and discussed funding for the Province with regard
to the Atlantic Gateway, the Northern Gateway and a lot of other issues. Then, met with the minister
responsible for the Province, Peter MacKay, and started with discussions on Labrador, 5 Wing Goose,
Search and Rescue, and, again, another host of issues, and then finished up with a very, very fruitful

2010-05-05

000878

Page 2 of5
meeting with the Minister ofFinance with regard to the acquisition of the eight point five interest in
Hibemia.
So, no, I did not have time to stop at the Ottawa office.

SOME HON. MEMBERS: Hear, hear!


MR. SPEAKER: The hon. the Opposition House Leader.
MR. KELVIN PARSONS: Thank you, Mr. Speaker.
I appreciate the Premier's update as to who he did see there. Obviously, he did not go by 1604 Metcalfe.
Mr. Speaker, it has been reported by The Telegram on a recent visit to Ottawa that newspapers were
piling up by the door and there was no presence at this office. Meanwhile, there is $378,000 budgeted
for this office this year, including a support worker making $54,000 a year.
I ask the Premier: What is the current status of the office? Is there anyone still on the payroll there, and
if so, what are they doing when we do not have a representative in Ottawa?

MR. SPEAKER: The hon. the Premier.


SOME HON. MEMBERS: Hear, hear!
PREMIER WILLIAMS: Mr. Speaker, we still have a presence on the ground in Ottawa, as the office
is staffed. We are maintaining that office because that office has been very useful for meetings when
ministers attend in Ottawa; they use it on a frequent basis.
I had conversations in Ottawa whereby people in Ottawa on the ground spoke extremely- very, very
highly of Dr. FitzGerald, who is referred to as Dr. Feelgood by the Opposition. I refer to him as Dr.
Seal good because of all the fantastic work he has done with regard to promoting the sealing industry in
Ottawa.

SOME HON. MEMBERS: Hear, hear!


PREMIER WILLIAMS: So we intend to maintain that office. We intend to keep it there. We think it
is very, very important that we have a connection. We think it is also very, very important that when
ministers go to town that they have a place where they can operate out of. In fact, we will be looking in
the very near future then to recruiting to have that position refilled.
SOME HON. MEMBERS: Hear, hear!
MR. SPEAKER: The hon. the Opposition House Leader.
MR. KELVIN PARSONS: Thank you, Mr. Speaker.
Both New Brunswick and Manitoba closed their offices in Ottawa. It is certainly obvious that our office
has had very little impact as the past few years have represented the most strained relationship our
Province has ever had with the federal government.

2010-05-05

000879

Page 3 of5
I ask the Premier: Are you prepared to follow the lead of these other provinces, let the Minister of
Intergovernmental Affairs do his job, save the taxpayers of this Province some $400,000 a year, finally
admit the experiment did not work, and close down the office?

SOME HON. MEMBERS: Oh, oh!


MR. SPEAKER: Order, please!
The hon. the Premier.

SOME HON. MEMBERS: Hear, hear!


PREMIER WILLIAMS: Mr. Speaker, I can tell the hon. member opposite what I am not prepared to
do. I am not prepared to give up fighting for the interests of the people ofNewfoundland and Labrador.
SOME HON. MEMBERS: Hear, hear!
PREMIER WILLIAMS: Time and time again we have aggressively challenged Ottawa on major
issues of importance to the people of this Province. The first round that we had with the former Liberal
government, we came back with a cheque for $2 billion, so I would thinkSOME HON. MEMBERS: Hear, hear!
PREMIER WILLIAMS: I would think our balance sheet is in pretty good shape at this stage, but we
do intend to fight for the interest of the people of the Province, but at the same time we have also proven
during the last round, which we consider to be a goodwill round, met with all the senior representatives
of the federal government, all of the ministers were made available to us on reasonable notice, they were
prepared to discuss any issues of importance to Newfoundland and Labrador, so I think at this stage, as a
result of our efforts in fighting for Newfoundlanders and Labradorians we have the respect of Ottawa.
SOME HON. MEMBERS: Hear, hear!
MR. SPEAKER: The hon. the Opposition House Leader.
MR. KELVIN PARSONS: Thank you, Mr. Speaker.
I say to the Premier, I would not crow too loudly about the Accord money these days. By the time we
get Abitibi settled there might be none of it left.

Mr. Speaker, we requested travel claims for the former Ottawa representative through FOI and we were
charged significant fees; however, we did pay for his 2007 travel claims to get a glimpse of his
activities. As outlined in the documents, the former Ambassador charged the people of this Province
seventy-two taxi trips from his private residence to work. There is nothing in his employment contact
that permits such claims and no other public servant is permitted to claim travel to and from work each
day.
I ask the Premier: Why did your office sign off on these travel claims, and do you consider it an
appropriate expense to be reimbursed by the taxpayers?

MR. SPEAKER: The hon. the Premier.

2010-05-05

000880

Page 4 of5
SOME HON. MEMBERS: Hear, hear!
PREMIER WILLIAMS: Mr. Speaker, now that the hon. member opposite has raised it let's talk about
the Abitibi exercise and let's talk about what we have done with regard to Abitibi.
The hon. member opposite knows, he is a lawyer, he is trained, he knows what the consequences would
have been if we, in fact, had not acted on the Abitibi file. If, in fact, we had stood back and had not
stepped in when we did and had not expropriated the property, one of two things would happened, either
the property would have been sold and the assets would have gone outside the Province, and the people
of the Province would have no say or no interest, or otherwise they would have entered into a
receivership, or a bankruptcy, or a consumer protection. At that point as well, the assets ofthe people of
Newfoundland and Labrador, our timber, our land, our water and our infrastructure would have been
gone. We would have been left, however though, with the environmental responsibilities and we would
have been left with the responsibility that we had to the workers in Grand Falls-Windsor, Botwood and
all the surrounding areas.
What we did, Mr. Speaker, because we had those assets, we, in fact, will be in a position, if we have to,
to do the environmental cleanup. We have put nearly $50 million into severance and the hon. member
opposite has stood up and has- knowing the difference- said that dealing with Grand Falls and dealing
with the Grand Falls mill we have incurred liabilities, environmental liabilities of over a couple of
hundred million dollars. That is just absolutely untrue -untrue.
SOME HON. MEMBERS: Hear, hear!
MR. SPEAKER: The hon. the Opposition House Leader.
MR. KELVIN PARSONS: Thank you, Mr. Speaker.
I guess we will see at the end of the day when all the court dust has settled on the court cases as to what
we actually are going to be on the hook for.
I will just ask the Premier: Would you like to give us an answer to my question about the taxi fares of
Dr. Feelgood?
SOME HON. MEMBERS: Oh, oh!
MR. SPEAKER: Order, please!
The hon. the Premier.
SOME HON. MEMBERS: Hear, hear!
PREMIER WILLIAMS: Mr. Speaker, it is obvious the priorities of the Opposition. You know, we are
here today- we have a fishery that is being dealt with, that is very, very important to all the people of
this Province, to all the communities in the Province. Have we heard a question on the fishery today?
Not a question.
AN HON. MEMBER: No, not one.
PREMIER WILLIAMS: Do you know what the hon. -

2010-05-05

000881

Page 5 of5
AN HON. MEMBER: (Inaudible).
PREMIER WILLIAMS: Maybe you will make some up now. Well, good for you if you make some up
out of it after.
What the hon. member opposite is concentrating on today is the Ottawa representative getting a drive in
bad weather from his office to the House of Commons where he does his business. Now if you want to
concentrate on taxis, then fill your boots, but I have more important things to do.
SOME HON. MEMBERS: Hear, hear!
MR. SPEAKER: Order, please!

2010-05-05

000882

Pages 883 to I

a 891

are withheld pursuant to section


sont retenues en vertu de l'article

23
of the Access to Information Act
de la Acces

a l'information

Canada-Newfoundland Atlantic Accord Implementation Act

Page 1 of2

REVENUE FUND

Revenue Fund

214. (1) There shall be established in the accounts of Canada an account to be known
as the Newfoundland Offshore Petroleum Resource Revenue Fund.
Payment
(2) The Federal Minister shall, at the times and in the manner prescribed,
(a) credit the Revenue Fund with
(i) where the Government of the Province has agreed to collect and is collecting in
accordance with a tax administration agreement entered into pursuant to section
209, on behalf of the Government of Canada, taxes, interest, penalties and other
sums payable under sections 207 and 208, an amount equal to the aggregate of the
amounts on account of taxes, interest, penalties and other sums collected pursuant
to those sections during any fiscal year, after taking into account any refunds,
remissions or other payments that are applicable in respect of such taxes, interest,
penalties and other sums,
(ii) an amount equal to the aggregate of the amounts assessed or reassessed in
respect of any fiscal year on account of taxes imposed pursuant to section 211, after
taking into account any credits, reductions, deductions, rebates, surtaxes and
remissions that are applicable in respect of such taxes,

(iii) where the .Government of the Province and the Board have entered into an
agreement pursuant to section 98 and the Board is collecting, in accordance with
the agreement, on behalf of the Government of Canada, royalties payable under
section 97, an amount equal to the aggregate of such royalties that have been
collected during any fiscal year, and
(iv) an amount equal to the aggregate of any amounts, other than those referred to
in subparagraph (iii), received and not required to be returned during any fiscal year
under Part II or any regulations made thereunder; and
(b) pay to Her Majesty in right of the Province, at the time and in the manner
prescribed, any amount credited to the Revenue Fund pursuant to paragraph (a).
i

Excess recoverable
(3) Where, pursuant to subsection (2), Her Majesty in right of the Province has
received any amount in excess of the amount to which it is entitled, the Federal Minister
may recover as a debt due to Her Majesty in right of Canada an amount equal to such
excess from any moneys that may be or may become payable to Her Majesty in right of
the Province pursuant to subsection (2) or under any other Act of Parliament.
JURISDICTION OF COURTS

Jurisdiction of courts

215. (1) Every court in the Province has jurisdiction in respect of matters arising in the

http://laws.justice.gc.ca/eng/C-7 .5/20100507 /page-1.html?rp2=HOME&rp3=SI&rp4=all...

2010-05-07

000892

Canada-Newfoundland Atlantic Accord Implementation Act

Page 2 of2

offshore area under this Part or Division VI of Part 11 or under any laws made
applicable by this Part or that Division to the offshore area, to the same extent as the
court has jurisdiction in respect of matters arising within its ordinary territorial division.
Presumption
(2) For the purposes of subsection (1), the offshore area shall be deemed to be within
the territorial limits of the judicial centre of St. John's.
Saving
(3) Nothing in this section limits the jurisdiction that a court may exercise apart from
this section.
Definition of "court"
( 4) In this section, "court" includes a judge thereof and any provincial court judge or
justice.

http://laws.justice.gc.ca/eng/C-7 .5/20100507/page-1.html?rp2=HOME&rp3=SI&rp4=all...

2010-05-07

000893

Page 1 ofl

Gilbert, Anne
From:

Cynthia. Bernier@international.gc.ca

Sent:

May 7, 2010 11 :56 AM

To:

Gilbert, Anne

5.14

Subject: RE: Background Material

HiAnne,

5.15(1)

Please see the information below :

From: Gilbert, Anne [mailto:Anne.Gilbert@pco-bcp.gc.ca]

Sent: May 7, 2010 10:23 AM


To: Bernier, Cynthia -TBI
Subject: RE: Background Material
Cynthia,

Thanks very much,


An ne

2010-05-07

000894

Page 1 of9

Smith, Robert
From:

Hill, Patrick

Sent:

May 7, 2010 6:15PM

To:

Smith, Robert

Cc:

Gilbert, Anne

5.23

Subject:

From: Smith, Robert


To: Hill, Patrick
Cc: Gilbert, Anne
Sent: Fri May 07 18:07:20 2010

Subject:

Robert

From: Gilbert, Anne

Sent: May 7, 2010 5:45PM


To: Hill, Patrick; Smith, Robert

Subject:
Thanks, Patrick.

From: Hill, Patrick

Sent: May 7, 2010 5:38 PM


To: Gilbert, Anne; Smith, Robert

Subject:

2010-12-10

000895

s.23
Page 2 of9

Patrick Hill
Assistant Director 1 Directeur adjoint
Legal Operations I Operations juridiques/conseillers
Privy Council Office 1 Bureau du Conseil Prive
Ottawa, Canada K1A OA3
P~trJcl<.bjiJ@pcQ:::PGQ,gG,G~

Telephone 1 Tehphone 613-957-5777


Facsimile 1 Telecopieur 613-957-5032
Government of Canada 1 Gouvernement du Canada
From: Gilbert, Anne

Sent: May 7, 2010 11:34 AM


To: Smith, Robert; Hill, Patrick

Subject: I
Thanks, Patrick.

Thanks,
An ne

From: Hill, Patrick

Sent: May 6, 2010 5:31PM


To: Gilbert, Anne
Cc: Smith, Robert

Subject:

Patrick Hill
Assistant Director 1 Directeur adjoint
Legal Operations 1 Operations juridiques/conseillers

2010-12-10

000896

Page 3 of9
Privy Council Office 1 Bureau du Conseil Prive
Ottawa, Canada K1A OA3

5.23

patrick.hill@pco-bcp.gc.ca
Telephone 1 Telephone 613-957-5777
Facsimile 1 Telecopieur 613-957-5032
Government of Canada 1 Gouvernement du Canada
From: Gilbert, Anne

Sent: May 6, 2010 5:26 PM


To: Hill, Patrick
Cc: Smith, Robert

Subject:
Patrick,

Thanks,
An ne
From: Hill, Patrick

Sent: May 6, 2010 1:31PM


To: Smith, Robert; Gilbert, Anne

Subject: r FYI

Patrick Hill
Assistant Director 1 Directeur adjoint
Legal Operations 1 Operations juridiques/conseillers
Privy Council Office 1 Bureau du Conseil Prive
Ottawa, Canada K1A OA3

Telephone 1 Telephone 613-957-5777


Facsimile 1 Telecopieur 613-957-5032
Government of Canada 1 Gouvernement du Canada
From: Rambod. Behboodi@fin .gc.ca [ mailto: Rambod .Behboodi@fin .gc.ca]

Sent: May 6, 2010 1:30 PM


To: Hill, Patrick; Kate.Thompson@fin.gc.ca

Subject:
'Thanks.

2010-12-10

000897

Page 4 of9

5.23

Rambod Behboodi
General Counsel and Executive Director I Avocat general et Directeur executif
General Legal Services I Services juridiques generaux
Department of Finance Canada I Ministere des Finances Canada
Ottawa, Canada K1A OG5
JjUTibgg_,Q_~_hlLQodi@fin.g_~,-~rr

Telephone I Telephone 613 995 8724 I Facsirnile I Telecopieur 613 944 5566
Teleimprimeur 613-995-1455 I Blackberry 613 894 554-3
Government of Canada

Teletypewriter

I Gouvernement du Canada

From: Hill, Patrick [mailto:Patrick.Hill@pco-bcp.gc.ca]

Sent: Thursday, May 06, 2010 11:57 AM


To: Behbonr!L
Subject:

Rr~mhnrl:

Thnmnc;nn

Kr~tP

Patrick Hill
Assistant Director 1 Directeur adjoint
Legal Operations 1 Operations juridiques/conseillers
Privy Council Office 1 Bureau du Conseil Prive
Ottawa, Canada K1A OA3
patrick.hill@pco-bcp.gc.ca
Telephone I Telephone 613-957-5777
Facsimile 1 Telecopieur 613-957-5032
Government of Canada 1 Gouvernement du Canada
From: sylvie.tabet@international.gc.ca [mailto:sylvie.tabet@international.gc.ca]

Sent: May 4, 2010 10:04 PM


To: Hill, Patrick
Cc: Smith, Robert; Gilbert, Anne; Vanstone, Melanie
Subject:
Patrick,

2010-12-10

000898

5.23

Page 5 of9

Sylvie Tabet

From: Hill, Patrick <Patrick.Hill@pco-bcp.gc.ca>


To: Tabet, Sylvie -JLTB
Cc: Smith, Robert <Robert.Smith@pco-bcp.gc.ca>; Gilbert, Anne <Anne.Gilbert@pco-bcp.gc.ca>;
Vanstone, Melanie <Melanie.Vanstone@pco-bcp.gc.ca>
Sent: Tue May 04 10:48:57 2010

Subject:

Patrick Hill
Assistant Director 1 Directeur adjoint
Legal Operations 1 Operations juridiques/conseillers
Privy Council Office 1 Bureau du Conseil Prive
Ottawa, Canada K1A OA3

Telephone 1 Telephone 613-957-5777


Facsimile 1 Telecopieur 613-957-5032
Government of Canada 1 Gouvernement du Canada
From: sylvie.tabet@international.gc.ca [mailto:sylvie.tabet@international.gc.ca]
Sent: May 3, 2010 11:15 PM
To: Hill, Patrick
Cc: Smith- RohPrt: Gilhf>rt_ Anne
Subject:

2010-12-10

000899

s.23

Page 6 of9

Sylvie Tabet

From: Hill, Patrick <Patrick.Hill@pco-bcp.gc.ca>


To: Tabet, Sylvie -JLTB
Cc: Smith, Robert <Robert.Smith@pco-bcp.gc.ca>; Gilbert, Anne <Anne.Gilbert@pco-bcp.gc.ca>
Sent: Mon May 03 09:38:45 2010
Subject:
Dear Sylvie -

Many thanks

Patrick Hill
Assistant Director 1 Directeur adjoint
Legal Operations 1 Operations juridiques/conseillers
Privy Council Office 1 Bureau du Conseil Prive
Ottawa, Canada K1A OA3
p~_tdgk. hill@pco-bq:~_,gc.ca

Telephone 1 Telephone 613-957-5777


Facsimile 1 Telecopieur 613-957-5032
Government of Canada 1 Gouvernement du Canada
From: Rambod.Behboodi@fin.gc.ca [mailto:Rambod.Behboodi@fin.gc.ca]

Sent: April 30, 2010 6:01 PM


To: Hill, Patrick; Kate.Thompson@fin.gc.ca
Cc: Smith, Robert; Gilbert, Anne; Vanstone, Melanie
Subject:

Dear Patrick

Rambod Behboodi
General Counsel and Executive Director I Avocat general et Directeur executif
General Legal Services I Services juridiques generaux

2010-12-10

000900

Page 7 of9

5.23
Department of Finance Canada
Ottawa, Canada KlA OGS

I Ministere des Finances Canada

rmnbQd,ht?:hhqg_c"!i@t}n,g~,9l

Telephone I Telephone 613 995 8724 I Facsimile I Telecopieur 613 944 5566
TCleimprimeur 613-995-1455 I Blackberry 6U 894 5543
Government of Canada

Teletypewriter

I Gouvcrnement du Canada

From: Hill, Patrick [mailto:Patrick.Hill@pco-bcp.gc.ca]

Sent: Wednesday, April 28, 2010 11:49 AM


To: Behboodi, Rambod; Thompson, Kate
Cc: Smith, Robert; Gilbert, Anne; Vanstone, Melanie
Subject:
Dear Rambod and Kate -

2010-12-10

000901

s.23

Page 8 of9

Please do not hesitate to be in touch with me with any questions or concerns.


Best regards,

Patrick Hill
Assistant Director 1 Directeur adjoint
Legal Operations 1 Operations juridiques/conseillers

2010-12-10

000902

Page 9 of9
Privy Council Office 1 Bureau du Conseil Prive
Ottawa, Canada K1A OA3
patrick.hill@pco-bcp.gc.ca
Telephone 1 Telephone 613-957-5777
Facsimile 1 Telecopieur 613-957-5032
Government of Canada 1 Gouvernement du Canada

2010-12-10

000903

Vanstone, Melanie
From:
Sent:

Vanstone, Melania
May 10,2010 11:45AM

To:
Subject:

Diogo, Brigitte; Sargent, Timothy


FW: Abitibi

Attachments:

BN_ABW v5 incl annex.doc

BN_ABW vS incl
annex.doc (391 ...

Melanie Vanstone
613-957-5447

s.21 (1 )(c)

-----Original Message----From: Vanstone, Melanie [mai1to:Me1anie.Vanstone@pco-bcp.gc.ca}


Sent: May 10, 2010 11:17 AM
To: Vanstone, Melanie
Subject: FW: Abitibi

Melanie Vanstone
melanie.vanstone@pco-bcp.gc.ca
613-957-5447
-----Original Message----From: Rosser, Tom [mailto:Tom.Rosser@NRCan-RNCan.gc.ca]
Sent: May 7, 2010 5:59 PM
To: O'neill John (DFAIT.MAECI); Sargent, Timothy; Kamarianakis Emmanuel (DFAIT.MAECI);
Vanstone, Melanie; Bernier Cynthia (DFAIT.MAECI); Booth, Darcie; Farrell, Jim
Cc: Nanduri Bhatt, Mal1ika; Kearns, Paul; Dubreuil, Marie-Andree
Subject: RE: Abitibi

s.21 (1 )(b)

Regards
Tom Rosser
Director General I Directeur general
Policy, Economics and Industry Branch I
1

000904

Direction de la politique, de l'economie et de l'industrie Canadian Forest Service I


Service canadien des forets Natural Resources Canada I Ressources naturelles Canada
Government of Canada I Gouvernement du Canada 580 Booth Street I 580 rue Booth 7th Floor I
7ieme etage Ottawa, Ontario K1A OE4 TRosser@nrcan.gc.ca
Tel: 613-947-7382
Fax: 613-947-7399

000905

SECRET

XXX-XXXXXX
INFORMATION NOTE

INTERNAL ASSESSMENT OF ABITIBI-BOWATER BUSINESS PLAN


Draft May 7, 2010
(For Information)

SUMMARY

These, as well as most if not all future closures


in the newsprint sector, will be located in Canada.

This assessment is based on AbitibiBowater's partially updated (April2010) Business Plan


and the restructuring update deck of April23, 2010.

5.21 (1 )(b)
s.21(1)(c)

000906

Page 907
is withheld pursuant to sections
est retenue en vertu des articles

21 (1 )(b), 21 (1 )(c)

of the Access to Information Act


de la Acces

a l'information

Page 908
is withheld pursuant to sections
est retenue en vertu des articles

21 (1 )(a), 21 (1 )(b), 21 (1 )(c)

of the Access to Information Act


de la Acces

a l'information

SECRET

Blank Page If Page


blanche

000909

Page 910
is withheld pursuant to sections
est retenue en vertu des articles

21 (1 )(b), 21 (1 )(c)

of the Access to Information Act


de la Acces

a l'information

SECRET

Figure 1- North American newsprint demand


14,000
................ "'-,

--Business Plan

12,000
'""--

........

-15-year trend
--Historical Pattern

10,000
'ii)
Q)

c
c

8,000

.s
0
0

e.

6,000

4,000

2,000

5.21 (1 )(b)
s.21(1)(c)

000911

Pages 912 to I

a 918

are withheld pursuant to sections


sont retenues en vertu des articles

21 (1 )(b), 21 (1 )(c)

of the Access to Information Act


de la Acces

a l'information

SECRET
Annex 1: Newsprint Capacity in Canada
Firm
AbitibiBowater

TotalC apac1ty
2 767 000

Kruger

943 000

White Birch
Alberta Newsprint
Canfor
Tembec
Catalyst
NewPage
Total

903 000
270 000
215 000
214 000
197 000
185 000
5 694 000

L ocatwn o fOJperaf10ns
Quebec (53%)
Ontario (3 8%)
Nova Scotia (9%)
Quebec (70%)
Newfoundland (30%)
Quebec (100%)
Alberta (100%)
British Columbia (1 00%)
Ontario (1 00%)
British Columbia (100%)
Nova Scotia (lOO%)
Quebec (53%)
Ontario (22%)
Nova Scotia (8%)
British Columbia (7%)
Alberta (5%)
Newfoundland (5%)

000919

Page 1 of 1

5.21 (1 )(b)
Gilbert, Anne

- -.

-~-
.... . ..

-~
... ---
--
. -
.

--
.. ---~---------------~

--

From:

John.O'Neill@international.gc.ca

Sent:

May 13, 2010 3:12PM

To:

Cynthia.Bernier@international.gc.ca; Gilbert, Anne

Cc:

Michaei.Wylie@international.gc.ca; Aladin.Legaultd'Auteuil@international.gc.ca

Subject: RE: Background Material


An ne,

Hope this helps


John

From: Bernier, Cynthia -TBI

Sent: May 13, 2010 2:58 PM


To: 'Gilbert, Anne'
Cc: O'Neill, John -TBI
Subject: RE: Background Material
Hi Anne,

Cynthia
--

............~.

-~..

....

~'-----------~

. -~
..... ~
... ~-~
. .~
....~
.. ~--~

From: Gilbert, Anne [mailto:Anne.Gilbert@pco-bcp.gc.ca]


Sent: Thursday, May 13, 2010 6:27 PM
To: Bernier, Cynthia -TBI
Subject: RE: Background Material
Cynthia,

Thanks again!
An ne

2010-05-13

000920

Pages 921 to I

a 928

are withheld pursuant to sections


sont retenues en vertu des articles

20(1 )(a), 23

of the Access to Information Act


de la Acces

a l'information

Page 929
is withheld pursuant to sections
est retenue en vertu des articles

21 (1 )(a), 23

of the Access to Information Act


de la Acces

a l'information

Pages 930 to I

a 944

are withheld pursuant to sections


sont retenues en vertu des articles

20(1 )(a), 20(1 )(b), 20(1 )(c), 20(1 )(d)

of the Access to Information Act


de la Acces

a l'information

Page 1 of 1

Paquet, Marie-France
From:

Aladin. Legaultd'Auteuil@international. ge. ea

Sent:

May 18,201011:57 AM

To:

eh ristian. codere@dee-eed. gc. ea; Ju lie.l nsley@international. gc.ea;


William.Murray@international.ge.ea; Michaei.Fine@international.gc.ca;
sylvie. tabet@international.ge. ea; COLI N. Bird@international. gc.ea;
Mehmet.Karman@international.ge.ea; dbhamjee@ede.ca; RChabot@edc.ca;
J Hendrieks@edc. ea; Carol. Nelder-Corvari@fi n. ge. ea; Dean. Beyea@fin. gc. ea;
John.Layton@fin.gc.ca; Philippe.Hall@fin.gc.ca; Elisha.Ram@fin.gc.ca;
Jennifer.Purves@fin.ge.ca; Jyotsna.Dalvi@ie.ge.ea; Yvon.Giroux@ic.gc.ca;
Ken. Montgomery@ic. gc. ea; Tom. Rosser@N RCan-RNCan. gc. ea; olaf. schwab@nrcan. gc. ea;
Mark. Boyland@NRCan-RNCan.gc.ca; Darcie. Booth@NRCan-RNCan.gc.ca; Diogo, Brigitte;
Paquet, Marie-France; Elaine.Brouea@international.gc.ca;
Emmanuei.Kamarianakis@international.gc.ca; Sheryne.MorcosMorin@international.gc.ca;
Ann ie. Bissonnette@international. ge. ea; Natalie. Caron @international. gc. ea;
Darrel. Houlahan@international.ge.ea; Erica. Berg@ic.gc.ca; Lisa. Charette@ic.gc.ca

Cc:

Cynthia.Bernier@international.ge.ea; Miehaei.Wylie@international.gc.ca;
John.O'Neill@international.gc.ca

Subject:

AbitibiBowater: Preliminary reports from NERA and KPMG

Attachments: NERA Initial Results Report- May 14, 2010.pdf; KPMG Phase 1- Preliminary Review of
AbitibiBowater Business Plan Report May 17 201 O.pdf
Colleagues,
Here are the two preliminary reports we have received from the two independant consultants:
1. NERA: calculation of the fair market value as at December 15, 2008 and March 2, 2009 of AbitibiBowater's
hydroelectric assets in Newfoundland.
2. KPMG: due diligence review of the current and prospective financial position of AbitibiBowater. We will receive
the final report Tomorrow.
Please note that this meeting will serve as a stock-taking and status update on the file.
The Commissionaires at the front desk at 111 Sussex will escort visitors to the meeting room. Please be advised
that visitors are required to show identification to receive a visitor's pass.
Best regards,

Aladin Legault d'Auteuil


Senior Trade Policy Officer I Agent principal de la politique commerciale
Investment Trade Policy Division (TBI) I
Direction de la politique commerciale sur 1' investissement (TBI)
Foreign Mfairs and International Trade Canada I Mfaires etrangeres et Commerce international Canada
Phone 1 Telephone: 613.944.8976
Fax 1 Telecopieur : 613.944.0679
aladin.legaultdauteuil@interl!ational.gc.ca

2010-05-18

000945

Pages 946 to I

a 1003

are withheld pursuant to sections


sont retenues en vertu des articles

20(1 )(a), 20(1 )(b), 20(1 )(c), 20(1 )(d)

of the Access to Information Act


de la Acces

a l'information

Date: 2010-05-18

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514 864-7270

P. 1 /15

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COURT OF APPEAL
CANADA
PROVINCE OF QUEBEC
REGISTRY OF MONTREAL
No:

DATE:

500-09-020594-107
(500-11-036133-094)
MAY 18, 2010

IN THE PRESENCE OF THE HONOURABLE JACQUES CHAMBERLAND, J.A.

HER MAJESTY THE QUEEN IN RIGHT OF THE PROVINCE OF NEWFOUNDLAND


AND LABRADOR
PETITIONER- Petitioner
V.
ABITIBIBOWATER INC. AND OTHERS
RESPONDENTS- Debtors

and
ERNST & YOUNG INC.
IMPLEADED PARTY- Monitor
and
AD HOC COMMITTEE OF BONDHOLDERS

and
AD HOC COMMITTEE OF THE SENIOR SECURED NOTEHOLDERS AND U.S.
BANK NATIONAL ASSOCIATION, INDENTURE TRUSTEE FOR THE SENIOR
SECURED NOTEHOLDERS
IMPLEADED PARTIES

JUDGMENT

[1]
I am seized, as a judge in chambers, of a motion by petitioner Her Majesty the
Queen in the Right of the Province of Newfoundland and Labrador (the "Province") for
leave to appeal from a judgment rendered by Gascon J. of the Quebec Superior Court,

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PAGE: 2

on March 31, 2010, under the Companies' Creditors Arrangement Act (R.S. Canada,
1985, c. C-36, as amended) (the "CCAA"). 1

****
[2]
The respondents ("Abitibi") form one of the world's largest publicly traded pulp
and paper manufacturers.
[3]
From approximately 1905 to the end of 2008, it carried on extensive industrial
activities at several locations in the province of Newfoundland and Labrador: mining
and processing of minerals, at Buchans; pulp and paper operations, at Grand FallsWindsor and Stephenville; shipping and storing, at Botwood; and logging camps at
many different locations across the province.
[4]
On December 4, 2008, Abitibi announced the closure of its last remaining mill
operation in the province, that located at Grand Falls-Windsor; the mill closure was
scheduled to be effective March 2009.
[5]
On December 16, 2008, the Province introduced and passed the AbitibiConsolidated Rights and Assets Act (S.N.L. 2008, c. C-A-1.01) (the "Abftibi Acf'), the
purpose of which was, as summarized by the judge of first instance {at par. 54), a) to
seize with immediate effect substantially all of the assets, property and undertakings of
Abitibi in the province, b) to cancel substantially all outstanding water and hydroelectric
contracts and agreements between Abitibi and the Province, c) to cancel pending legal
proceedings of Abitibi against the Province in respect of water rights, d) to deny Abitibi
any compensation for the seized assets and, finally, e) to deny Abitibi access to the

courts to seek redress. 2


[6]
In April 2009, Abitibi filed a Notice of Intent to Submit a Claim to Arbitration under
Chapter 11 of the North American Free Trade Agreement ("NAFTA") for the losses
allegedly arising from this confiscation effected by the Province. 3
[7]

Abitibi also filed for protection under the CCM.

[8]
On April 17, 2009, the Quebec Superior Court issued an initial order (the "Initial
Order") pursuant to the CCAA with respect to Abitibi. The initial stay of proceedings
has been extended a few times since, and more recently to June 18, 2010.

2
3

My reference to the CCAA shall refer to the version of the Act applicable to the present proceedings,
and not to fhe "Amended CCAA" in force since the amendments of September 18, 2009.
"According to Abitibi, its losses resulting from the enactment of the Abitibi Act will exceed $300
million" (judgment a quo, par. 59).
"( . ) Abitlbl officially filed, on February 25, 201 0, a Notice of Arbitration under chapter 11 of NAFTA to
pursue its claim for redress" (judgment a quo, par. 62).

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[9]
During the restructuring process undertaken as a result, a First Stay Extension
Order was issued on May 14, 2009 and a Claims Procedure Order (the "CPO") on
August 26, 2009, the purpose of the CPO being to set up a claims procedure for
Abitibi's creditors.

[1 0]

On June 12, 2009, the Province asked Abitibi to provide certain reports for the
Abitibi sites, including environmental site assessment reports.
On June 18, 2009,
Abitibi replied that the request would remain under consideration in light of the Abitibl
Act, the lniti;:JI Order issued under the CCAA and another pending ministerial order
concerning the Buchans site.
In July 2009, the Province's attorneys retained the
services of environmental consultants to undertake environmental site assessments at
the sites. On September 3, 2009, Abitibi and the Province entered into an agreement
whereby the former would provide access to the sites to the environmental consultants
for the purpose of conducting the assessments envisaged, subject to a number of
conditions.

[11]

On October 16, 2009, the Province filed a Motion for a Declaration that the
Petitioner is entitled to Access the Electronic Data Rooms Created by the Debtors (the
"Data Room Motion"), the result of which is summarized by the judge of first instance in
the judgment a quo:
[72]
In that motion. the Province alleged that it needed to access the
electronic data rooms of Abitibi to properly assess its financial status and make
informed decisions in the restructuring. lt maintained that it had a duty to inform
itself of the present and future potential ability of Abitibi to cover the Province's
claims.
In particular, the Province argued that Abitibi was responsible towards it
[73]
for alleged environmental contamination from the mine located in Buchans.
Relying on numerous media reports that it then filed in the record, the Province
claimed that because of Abitibi's economic activities, the latter had exposed itself
to many environmental obligations, the precise extent of which remained unclear.
[74]
The Province notably alleged that it had incurred significant costs in that
regard. lt added, furthermore, that agreements had been entered into for the
Province's environmental consultants to have access to the sites for the purpose
of determining the full nature and extent of Abitibi's environmental obligations.
[75]
On November 9, 2009, the Court dismissed the Data Room Motion with
costs. The Province did not appeal that ruling.
[76]
The Court notably concluded that the Province had not yet provided
reasonable and convincing evidence in support of its alleged status of potential
creditor for environmental problems resulting from Abitibi's economic activities.

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[77]
The Court emphasized that the Province wanted access to the electronic
data rooms not to enhance the restructuring process, but to assess the extent of
Abitibi's present and future ability to cover its undetermined and potential
environmental claims that had yet to be filed in the claims process:
[88] Lastly, the alleged legitimate public interest relied upon by the Province is
not In furtherance of the purposes of the CCAA. lt is, to the contrary, in
furtherance of the Province's own interest of determining the real value of its
potential claims that are yet to be established.

[89} Put otherwise, the Province wants to have access to the electronic data
rooms to better evaluate whether Abitibi's pockets will, one day, be deep enough.

[12] In November 2009, the Province's environmental consultants issued the reports
4
setting out the results of their environmental site assessment reports.
[13] On November 12, 2009, the Minister of Environment and ConseiVation of the
Province, acting pursuant to The Environmental Protection Act, S.N.L. 2002, C-E-14.2,
section 99 (the "EPA'?, issued five Ministerial Orders against Abitibi (the "EPA Orders"),
which the judge of first instance summarizes as follows:
(15]
The EPA Orders were in relation to five (5) sites located in Newfoundland
and Labrador ("NL"} where Abitibi had carried on industrial activities at different
times between 1905 and 2008. In essence, they purported to order Abitibi to
perform, at its O"n expense, the following:
a)

the submission for approval by the Province, by January 15, 2010,


of a detailed Remediation Action Plan for all sites identified as
allegedly having exceedances greater than the applicable limits;

b)

the completion of the approved site re mediation actions by


January 15, 2011, or by another date as may be agreed upon with
the Province's Department of Environment and Conservation
("ENVC"); and

c)

the closure of all landfills and lagoonslimpoundments associated


with each site by January 15, 2011.

[14] On the very same day, the Province served the Motion for a Declaration
Regarding Orders Issued Pursuant to the Environmental Protection Act (the "EPA
Motion"), the conclusions of which read as follows in its amended version of February

15,2010:
4

"These reports concluded that the Abltlbl Sites covered by the assessments (and, in many instances,
the property adjacent thereto) suffered from extensive contamination allegedly in excess of applicable
standards" Qudgment a quo, par. 78).

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PAGE: 5

GRANT this amended motion for a declaration regarding orders issued pursuant
to the Environmental Protection Act, S.N.L. 2002, chap. E-14.02.
DECLARE that the Claims Procedure Order shall not bar, extinguish or
otherwise affect the enforceability of orders made against the Debtors, the
Property or the Directors {all as defined in the Initial Order) or others, by Her
Majesty the Queen in Right of the Federal or a provincial government. or her
agents, pursuant to her exercise of powers, rights or duties in relation to matters
involving public health, safety, security, public order or the environment, provided
that any financial or monetary fines or orders may be affected by the Claims
Procedure Order.
DECLARE that. for greater certainty, that the orders issued by the Minister
against Abitibi on 12 November 2009 pursuant to s. 99 of the EPA are not barred
or extinguished and their enforceability is not otherwise affected by the Claims
Procedure Order and, in particular, but without limiting the generality of the
foregoing, by paragraphs 3( 1) and 15 of that order.
EXEMPT, if applicable, the Petitioner from having to serve this motion and from
any notice or delay of presentation.
GRANT such further and other relief as this Court deems just and proper.
GRANT the provisional execution of this Order notwithstanding any appeal and
without the necessity of furnishing any security.
THE WHOLE WITHOUT COSTS, save and except in case of contestation.

[15]

For the Province, the EPA orders are in relation to the environment.

They are
not financial or monetary fines or orders and cannot qualify as "Claims"' under the

CCAA. They simply require Abltibi to take steps to comply with its statutory obligations
under the Province's EPA. As such the EPA Orders fall within the ambit of the First
Stay Extension Order (par. 10.1) and are neither stayed nor subject to the claims
In the alternative, if the judge intended for the CPO to nevertheless bar,
process.
extinguish or otherwise affect the enforceability of orders like the EPA Orders, he would
be acting outside its statutory jurisdiction. In other words, to the extent that the CPO
affects the enforceability of the EPA Orders it is constitutionally ineffective.

[16] In regard to this alternative constitutional argument the Province served a Notice
of Intention pursuant to Article 95 of the Quebec Code of Civil Procedure to the Attorney
General for Canada and all the other provinces:
[25]
In that regard, the Province served a Notice of Intention pursuant to
Article 95 C.C.P. to the Attorney Generals for Canada and all the other
provinces, indicating that it was hereby seeking a declaration that:

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500-09-020594-1 07
(1)

a court vested with jurisdiction over

company pursuant to the

CCAA does not possess the_ constitutional competence to exercise a


statutory or discretionary power to bar or extinguish liabilities, obligations
or duties owed to a province arising out of laws enacted by its legislature
pursuant to s. 92 of the Constitution Act, 1867, save and except to the
extent that the liability, obligation or duty is a "claim provable" within the
meaning of s. 2 of the B!A;

(2)
a court vested with jurisdiction over a company pursuant to the
CCAA does not possess the constitutional competence to exercise a
statutory or discretionary power to fetter the discretion of a Minister of
provincial Crown under a law validly enacted by that province; and

(3)
the Quebec Superior Court does not have the constitutional
competence to exercise a statutory or discretionary power under the
CCAA to bar the enforcement of or to extinguish the non-monetary EPA
Orders issued by the Province or to fetter the discretion of the Minister
5
under the EPA.

[17] As a result of this Notice of Intention, the Province of British-Columbia intervened


to support the EPA Motion: the other Attorneys General did not.
[18] The EPA Motion was contested by Abitibi, which not only asked for its dismissal
but also sought itself a declaration confirming that:
(a)

the EPA Orders are stayed by the stay of proceedings issued


in the Initial Order and are not subject to the narrow
exception provided at paragraph 10.1 of the First Stay
Extension Order; and

(b)

the Province's filing of any claim based in whole or in part on


the EPA Orders is now barred by paragraph 15 of the Claims
Procedure Order. such that no extension of the Claims Bar
Date should be granted to allow the latter to fife a claim on
that basis in the claims process.

[19] Abitibi's position was supported by key groups of its creditors and by the
Impleaded Party (the "Monitor'') who, however, did not express any view on the issue of
the extension, if any, of the claims bar date for the benefit of the Province.
[20]

The Motion was heard by Gascon J. on February 24, 25 and 26, 2010.

*If***
5

Judgment a quo, par. 25.

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500-09-020594-107

[21]
The judgment a quo was rendered on March 31, 2010.
lt is 312 paragraphs
long. The questions to be resolved are identified at par. 125 of the judgment a quo:
[125] Based on this review of the motion at issue, the positions of the parties
involved, and the applicable factual background and legal framework, the
questions to be resolved in this case can be summarized as follows:

[22]

a)

what is the true nature of the EPA Orders? Are they orders issued
in regard of statutory non-monetary obligations of Abitibi or orders
that are in substance financial or monetary in nature?

b)

if the EPA Orders are orders issued in regard of statutory nonmonetary obligations of Abitibi, does the Court have either the
statutory jurisdiction or constitutional authority to include them in
the definition of "Claim" found in the Claims Procedure Order?

Gascon

J.'s reasoning is summarized at paragraph 127-139:

[127] Contrary to Abitibi, the Province and the HMQBC did not put much
emphasis on the factual context relevant to the questions at issue. With all due
respect to their position, the Court considers that this case must, in the end, be
decided first and foremost taking into consideration the particular fact pattern in
dispute.

[128] To that end, nobody truly contests that in facilitating the conclusion of an
arrangement under the CCAA, the Court has jurisdiction to subject "claims" to a
claims process and to determine who Abitibi's "creditors" might be in that regard.
In doing so, the Court can certainly seek to uncover the true nature of the EPA
Orders. Their proper characterization is within the jurisdiction of the Court.
[129] Despite being framed as "regulatory orders", the EPA Orders have the
effect of compelling Abitibi to expend material sums of money to remediate
property that it either no longer owns or no longer uses in its business, while
having little or no net value to Abitibi and its stakeholders.
[130] In the Court's opinion, based on the evidence filed in the record, the EPA
Orders are in substance financial or monetary in nature. Consequently, they are
not exempted from the First Stay Extension Order or the Claims Procedure
Order.

[131] As a result, the monetary consequences of these orders should be


treated as claims in these CCAA proceedings. Such claims shall be subject to
compromise and the Province, if it asks and is allowed to file a late proof of claim
in this respect, shall be entitled to participate in the negotiation of, and to receive
its pro-rata distribution under, any plan of arrangement to be filed by Abitibi.

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[132] There is, accordingly, no basis in fact or in law to grant. the conclusions
sought in the EPA Motion. This would have the effect of giving the Province a
preference over other creditors, which is simply unacceptable.
[133] To reach this conclusion, the Court relies on many considerations,
including:
The provisions of the CCAA;
The true nature and impact of the EPA Orders;
The factual context of their issuance and their content;
The Province's behavior prior and after their issuance;
The EPA and the applicable case law; and
The end result of the Province's position.
In view of this conclusion, it is not necessary to discuss the Province's
and the Intervening Parties' other arguments on the lack of statutory jurisdiction
or constitutional authority for the Court to include statutory non-monetary
obligations in the definition of 11 Ciaim" found in the Claims Procedure Order.

[134]

[135] As the Court concludes that the Province's EPA Orders are indeed claims
because. of their obvious financial and monetary nature, the determination of
these other questions will have to wait another day, if not another restructuring.
Declaratory judgments and questions of statutory jurisdiction or constitutional
authority s~ould not be issued or decided in a factual vacuum. As shown here,
the facts involved are normally critical in assessing such matters.
[136] This finding entails the dismissal of the Intervention of HMQBC and the
AGBC as well.
[137] Abitibi remains in ownership and occupation of the relevant properties it
still possesses in BC. No orders of any sort and no notice of non-compliance are
outstanding in regard of any environmental obligations of Abitibi in that province.
Simply put, there are no pending issue to resolve between Abitibi and the
Intervening Parties.
[138] This being so, the conclusions sought by Abitibi in its Amended
Contestation will be granted, albeit only in part. The Court considers that it is
premature to immediately rule that the Province is barred from filing any late
claim in the claims process as a result of the EPA Orders. This issue will be
addressed, if need to, if and when such a request is in fact presented.

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[139]
[23]

P. 10 /15

The Court's explanations follow.

The conclusions of the judgment read as follows:


[307) DISMISSES the Amended Motion for a Declaration Regarding Orders
Issued Pursuant to the Environmental Protection Act of the Petitioner, Her
Majesty the Queen in Right of the Province of Newfoundland and Labrador (the
"Province");
[308] DISMISSES the Intervention of the Intervening Parties, Her Majesty the
Queen in right of the Province of British Columbia (the "HMQBC") and the
Attorney General for British Columbia (the ;cAGBC");
[309] DECLARES that the orders issued against the Debtors by the Minister of
Environment and Conservation of the Province on November 12, 2009, pursuant
to s. 99 of the Environmental Protection Act, S.N.L. 2002, chap. E-14.02, (the
"EPA Orders"), are stayed under paragraph 10 of the Initial Order issued by the
Court on April 17, 2009, and are not subject to the exception found at paragraph
10.1 of that Initial Order;
f310J DECLARES that the Province's filing of any claim based on the EPA
Orders is subject to the Claims Procedure Order issued by the Court on August
26, 2009, including the claims process detailed therein;

[311] RESERVES to the Province its right, if any, to request an extension of the
Claims Bar Date (as defined in the Claims Procedure Order) in that regard and to
the Debtors their right, if any, to contest any such extension request;
[312] WITH COSTS against the Province in favor of the Debtors, but WITHOUT
COSTS against the HMQBC and the AGBC.

*****
[24] A summary presentation of the Province's grounds of appeal, going by chapter
titles only, would read as follows:
1. The judge of first instance disregarded the principles of federalism.
i)

He was required to give effect to the EPA and the Abitibi Act but failed

to do so;
ii)

The Minister of Environment and Conservation, and not the judge


acting pursuant to the CCAA, has the exclusive jurisdiction to decide
how the EPA is to be applied to Abitibi;

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500-09-020594-107
iii)

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The Legislature of the Province, and not the judge acting pursuant to
the CCM, has the exclusive jurisdiction to determine property and civil
rights in the Province.

2. Provincial legislation operates in the insolvency context.

3. The CCAA cannot be interpreted to give a judge acting pursuant to the CCAA the
power to immunise Abitibi from compliance with the EPA Orders or to avoid the
Abitibi Act.

i)

The judge acting pursuant to the CCAA cannot define "claim" however
he or she wishes;

ii)

The judge acting pursuant to the CCAA does not have the
discretionary power to ensure a successful restructuring regardless of
the law.

*****
[25] There is no appeal as of right from decisions made under the CCM; leave to
appeal is a condition precedent to an appeal being allowed to proceed (s. 13 CCAA).

[26] This requirement stems from a clear intention of Parliament to restrict appeal
rights having regard to the nature and object of CCM proceedings; an appeal court
should be cautious about intervening in the CCAA process. This is not to say that
leave will never be granted but it should be so only "sparingly" (In Re Pacific National
Lease Holding Corp. (1992), 15 C.B.R. (3d) 265, at 272 (B.C.C.A.)).
[27] The test for determining whether leave should be granted was enunciated by
Wittman J.A. (as he then was) in Re: Canadian Airlines Corp. (2000), 19 C.B.R. (4th) 33
(C.A. Alta):
The general criterion is embodied in the concept that there must be serious and
arguable grounds that are of real and significant interest to the parties: ( ... )
Subsumed in the general criterion are four applicable elements: (1) whether the
point on appeal is of significance to the practice; {2} whether the point raised is of
significance to the action itself; (3) whether the appeal is prima facie meritorious
or, on the other hand, whether it is frivolous; and (4} whether the appeal will
unduly hinder the progress of the action.

[281

This test was considered and applied by this Court in many instances.

[29] The burden rests on the party applying for leave to demonstrate that the
cumulative criteria set forth above are met.
[30]

This is the test I intend to apply here.

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[31] lt is my view that the Province's application raises no issue which satisfies the
test for granting leave to appeal under the CCAA.

[32] The Province's grounds of appeal are ably couched in constitutional terms
(articulated mainly around the power of a judge acting pursuant to the CCAA to
"immunise" a company from compliance with orders issued under provincial
environmental legislation or to avoid the consequences of provincial expropriation
legislation) but, as the judge of first instance noted, these constitutional issues, albeit of
undeniable intellectual interest, are of no genuine importance in the face of his
conclusion regarding the true nature of the EPA Orders.
[33] The judgment a quo does not "immunise" Abitibi from compliance with the EPA
Orders, it merely characterizes these orders in the context of the restructuring process
engaged pursuant to the CCAA.
[34] As a matter of fact, Gascon J. declined to grant Abitibi's conclusion seeking, in its
Amended Contestation of January 20, 2010, a declaration confirming that the EPA
Orders were stayed and that the Province's filing of a claim based on such orders is
now barred by the terms of the CPO (par. 15 thereof); on the contrary, he explicitly
reserved the Province's right to seek an extension of the claims bar date in order to file
a claim and, should its claim be allowed, to participate in the negotiation of, and share in
the proceeds from, any plan of arrangement, alongside Abitibi's other unsecured
creditors.
There is thus no question of relieving Abitibi from its environmental
obligations under the Province's relevant legislation.
[35] The first question the judge of first instance had to answer was whether the EPA
Orders were Issued in regard to statutory non-monetary obligations of Abitibi or were in
substance financial or monetary in nature. All parties appearing before him agreed that
if the EPA Orders were financial or monetary in nature, as opposed to being pure
regulatory orders, they then would fall within the meaning of "claim" under the CCAA
and "provable or contingent claim" under the BIA; a claims process such as the one
ordered in the Abitibi restructuring would therefore cover them.
[36] A judge acting pursuant to the CCAA has jurisdiction to subject "claims" to a
precise claims process and to determine who Abitibi's "creditors" might be in that
regard. As mentioned above, the Province does not dispute this essential premise;
rather it disputes whether the EPA Orders were properly found to be truly financial or
monetary in nature.
[37} In my view there is no reasonable chance of success to the Province's position in
this connection.
[38] Gascon J. found, on the facts and in the context of this case, that the EPA
Orders were in substance financial or monetary in nature. This is essentially a finding
of fact reached after considering 1) the true nature and impact of the CCM Gudgement

001015

Date: 2010-05-18

Heure: 12:27:45

cour d'appel - Montreal - Greffe, Fax : 514 864-7270

500-09-020594-1 07

P. 13 /15

PAGE: 12

a quo, par. 160-183}, 2) the factual context ofthe issuance of the EPA Orders. and their
content (par. 184-211 ), 3) the Province's behaviour prior and after the issuance of the
EPA Orders (par. 212-236), 4) the EPA and the applicable case law (par. 237-271) and
5) the end result of the Province's position (par. 272-296).
[39] I fail to see how this conclusive finding of fact definitively fixing the true character
of the dispute as being in pith and substance one which relates to a monetary claim
against Abitibi could be successfully challenged in appeal.
[40] The Province's position is a) that it alone holds the right to modify the nature of its
claim -from one issued in regard of Abitibi's statutory non-monetary obligation into a
financial or monetary one - by converting the regulatory order into a monetary one,
using the debt-creating provision of the EPA, 6 and b) that it can, if it so chooses,
postpone that conversion until after the restructuring is completed.
[41] This position is, in my opinion, untenable in the context of an insolvent company
involved in a restructuring process pursuant to the CCAA; this contention, as Gascon J.
observed, boils down to claiming "that a provincial regulator could have the non
reviewable right to determine whether obligations it controls or creates will be subject to
compromise under the CCAA or whether they will enjoy a superiority beyond the reach
of compromise" (judgment a quo, par. 273).
[42] The judge of first instance, acting pursuant to the CCAA, had jurisdiction to
subject all "claims" against Abitibi to a claims process (the "CPO"), to determine who
Abitibi's "creditors" might be and, in that context, to determine the nature of the EPA
Orders without being bound to the form in which the Province had clothed its position.
[43] The compromise of monetary claims is at the very core of the bankruptcy and
lt was made clear in the evidence
insolvency jurisdiction underpinning the CCM.
adduced before the judge of first instance that the EPA Orders advanced by the
Province, if found to survive the CCAA process uncompromised, would be fatal to a
restructuring of Abitibi.
[44] I agree with counsel for Abitibi that there is nothing new or unusual in the
analysis brought bythe judge of first instance of what a "claim" is under the CCAA: the
broad definition of "claim" under the CCM includes "contingent claims", a legal reality
reflected in the definition of "claim" in the GPO which, it is worth noting in passing, was
not contested by the Province, either before it was issued, by making representations to
the judge of first instance, or after, by lodging an appeal against it, despite the fact that
its name appeared on the service list and that it was made aware of its existence
Gudgment a quo, footnote 9).
6

S. 102(2) of the PA permits the minister to take action to carry out the terms of the order if. the
person to whom it is directed fails to comply with it; the costs, expenses or charges so incurred are

recoverable "as a debt owed to the Crown".

001016

Date: 2010-05-18

Heure: 12:27:45

500-09-020594-107

cour. d'appel -Montreal - Greffe, Fax : 514 864-7270

P. 14 /15

PAGE: 13

[45] Again I agree with counsel for Abitibi that Gascon J., by dismissing the notion
that the Province could choose the timing of the creation of its financial or monetary
claim against Abitibi deriving from the EPA Orders, properly prevented it from gaining
.an unfair advantage over the company's other creditors, the whole in line with the
purposes of the CCAA.
[46] For these reasons, and without getting into all the details of the reasoning of the
judge of first instance, I see no prima facie merit to the appeal envisaged by the
Province.
[47] In the context of an appeal presenting no reasonable chance of success, it
becomes obvious that the appeal proceedings would "unduly hinder the progress of the
action". The fundamental purpose of the CCAA proceedings is to enable Abitibi to
attempt to reorganize its affairs by proposing a plan of arrangement to its creditors. All
parties to the CCAA proceedings, except the Province, agree that the appeal would
necessarily lengthen the restructuring process and would, according to the Monitor
(Plan of Argument of the Monitor, May 10, 201 0, par. 10), "hinder the ability of [Abitibi]
to successfully restructure".
[48] A draft of Abitibi's plan of arrangement or compromise was filed on May 4, 2010
with a view, according to its attorneys, to conforming to a timetable for a rapid exit from
the CCAA proceedings by the end of September 2010. If leave to appeal was to be
granted, the fate of the EPA Orders would in all likelihood remain outstanding at the
time of the meeting of creditors and the vote in respect of Abitibi's plan. According to
the Monitor, the fact that the matter is not finally determined prior to the vote in respect
of the plan will have a material impact on the net value available to Abitibi's creditors
and create concerns for the sources of potential exit financing.
The restructuring
process, concludes the Monitor, will likely become more complicated, including further
delays and costs.

[49] One final word before concluding. The Province is concerned with the judge of
first instance referring to the possibility for Abitibi "to raise the counter-claim argument in
front of the CCAA Court"7 notwithstanding the fact that the Abitibi Act immunises the
Crown from all proceedings based on a cause of action arising from or incidental to the
operation of the Act.
[50] This concern does not justify, in my opinion, granting leave to appeal. First, this
statement from the judge of first instance is nowhere to be found in the conclusions of
the judgement a quo.
Second, the statement is only one of the many reasons
expressed by the judge offirst instance to justify the dismissal of the Province's motion.
Third, no doubt this issue will be raised again, and fully debated, if the Province is
allowed to file a late claim based on the EPA Orders.

Judgment a quo, par. 189.

001017

Date: 2010-05-18

Heure: 12:27:45

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500-09-020594-1 07

P. 15 /15

PAGE: 14

[51] The Province's Motion for Leave to Appeal pursuant to Sections 13 and 14 of the
CCAA is dismissed, with costs.

JACQ

S CHAMBERLAND, J.A.

Mr. David R. Wingfield


Mrs. Catherine Powell
WEIR FOULDS
For Petitioner
Mr. Sean F. Dunphy
Mr. Joseph Reynaud
STIKEMAN ELLIOTT
For Respondents
Mr. Robert I. Thornton
THORNTON GROUT FINNIGAN
and
Mtre Gilles Paquin
FISHMAN FLANZ MELAND PAQUIN
For Enrst & Young Inc.
Mr. Fred Myers
GOODMANS
and

Mtre Jean-Yves Simard


LAVERY, DE BILLY
For the Ad Hoc Committee of Bondholders
Mtre Vanessa Jodoin
BORDEN, LADNER, GERVAIS
For the Ad Hoc Committee of the Senior Secured Noteholders and U.S. Bank National
Association, Indenture Trustee for the Senior Secured Noteholders

Date of hearing:

May 12, 2010

001018

Decision- Newfoundland and Labrador c. AbitibiBowater inc.- 2010 QCCA 965

[16]

Page 1 of 1

In regard to this alternative constitutional argument the Province served a Notice of Intention pursuant to Article 95 of the

Quebec Code of Civil Procedure to the Attorney General for Canada and all the other provinces:

[25]
In that regard, the Province served a Notice of Intention pursuant to Article 95 C.CP to the Attorney Generals for Canada and
all the other provinces, indicating that it was hereby seeking a declaration that
(1)
a court vested with jurisdiction over a company pursuant to the CCAA does not possess the constitutional
competence to exercise a statutory or discretionary power to bar or extinguish liabilities, obligations or duties owed
to a province arising out of laws enacted by its legislature pursuant to s. 92 of the Constitution Act, 1867, save and
except to the extent that the liability, obligation or duty is a "claim provable" within the meaning of s. 2 of the BIA;
(2)
a court vested with jurisdiction over a company pursuant to the CCAA does not possess the constitutional
competence to exercise a statutory or discretionary power to fetter the discretion of a Minister of a provincial Crown
under a law validly enacted by that province; and
(3)
the Quebec Superior Court does not have the constitutional competence to exercise a statutory or
discretionary power under the CCAA to bar the enforcement of or to extinguish the non-monetary EPA Orders
[17]

issued by the Province or to fetter the discretion of the Minister under the EPA[5]
As a result of this Notice of Intention, the Province of British-Columbia intervened to support the EPA Motion; the other

Attorneys Genera! did not.

001019
http://www.jugements.qc.ca/php/decision.php?liste=45633303&doc=A32B6C2FA4A90F7A9F8C65489ADF3C79237C349FF ... 2010-11-25

Message

5.14

Page 1 of2

5.23
Gilbert, Anne
From:

Hill, Patrick

Sent:

May 21, 2010 5:58 PM

To:

Gilbert, Anne

Cc:

Smith, Robert

Subject: RE:

Patrick Hill
Assistant Director 1 Directeur adjoint
Legal Operations I Operations juridiques/conseillers
Privy Council Office 1 Bureau du Conseil Prive
Ottawa, Canada K1A OA3

patrick. hill@pco-bcp.gc.ca

Telephone 1 Telephone 613-957-5777


Facsimile 1 Telecopieur 613-957-5032
Government of Canada 1 Gouvernement du Canada

-----Original Message----From: Gilbert, Anne


Sent: May 21, 2010 5:20 PM
To: Hill, Patrick
Cc: Smith, Robert

Subject:
Patrick,

2010-05-25

001020

Page 1021
is withheld pursuant to sections
est retenue en vertu des articles

14,23

of the Access to Information Act


de la Acces

a l'information

SECRET
XXX-XXXXXX

Attachment 1

INFORMATION NOTE

INTERNAL ASSESSMENT OF ABITIBI-BOWATER BUSINESS PLAN


Draft May 25, 2010
(For Information)
SUMMARY

For Q1 2010, AbitibiBowater reported losses of $500 million, $300 million of which are
attributable to operating losses and interest payments.
Sharply declining demand for newsprint will likely require the Canadian newsprint sector
to shed more than 1 700 jobs over the next four years (in addition to those jobs already
lost in Gatineau, and expected to be lost in Clermont) .

This assessment is based on AbitibiBowater' s partially updated (April 201 0) Business Plan and
the restructuring update deck of April23, 2010, as well as company announcements up to May
24th. 2010.

EXCHANGE RATE

5.21 (1 )(b)
5.21 (1 )(c)

001022

Page 1023
is withheld pursuant to sections
est retenue en vertu des articles

21 (1 )(b), 21 (1 )(c)

of the Access to Information Act


de la Acces

a l'information

Page 1024
is withheld pursuant to sections
est retenue en vertu des articles

21 (1 )(a), 21 (1 )(b), 21 (1 )(c)

of the Access to Information Act


de la Acces

a l'information

SECRET

Blank Page If Page


blanche

001025

s.21(1)(b)

SECRET

s.21 (1 )(c)
Internal Assessment of Business Plan

Draft May 25, 2010

This assessment is done based on AbitibiBowater's partially updated (April2010) Business


Plan and the restructuring update deck of April23, 2010. Major announcements made during
the May 17-25, 2010 period have also been considered .

We do not have access to updated financial information for the company. Additional
information will be available once KPMG completes their assessment.

001026

SECRET

Figure 1- North American newsprint demand


14,000

12,000

-Business Plan

5.21 (1 )(b)

-15-yeartrend

5.21 (1 )(c)

---Historical Pattern

10,000

en
Q)

c:
c:

8,000

.9
0
0

e.

6,000

4,000

2,000

001027

Pages 1028 to I

a 1035

are withheld pursuant to sections


sont retenues en vertu des articles

21 (1 )(b), 21 (1 )(c)

of the Access to Information Act


de la Acces

a l'information

SECRET
Annex 1: Newsprint Capacity in Canada
Firm
AbitibiBowater

Total Capacity
2 767 000

Kruger

943 000

White Birch
Alberta Newsprint
Canfor
Tembec
Catalyst
NewPage
Total

903 000
270 000
215 000
214 000
197 000
185 000
5 694 000

Location of Operations
Quebec (53%)
Ontario (38%)
Nova Scotia (9%)
Quebec (70%)
Newfoundland (30%)
Quebec (100%)
Alberta (1 00%)
British Columbia (1 00%)
Ontario (1 00%)
British Columbia (100%)
Nova Scotia (100%)
Quebec (53%)
Ontario (22%)
Nova Scotia (8%)
British Columbia (7%)
Alberta (5%)
Newfoundland (5%)

001036

Pages 1037 to I

a 1038

are withheld pursuant to sections


sont retenues en vertu des articles

21 (1 )(b), 21 (1 )(c)

of the Access to Information Act


de la Acces

a l'information

5.14

5.15(1)
SECRET

MEMORANDUM FOR SERGE DUPONT

DEPUTY MINISTERS AND CLERK MEETING ON


INTERNATIONAL TRADE
(Information Only)

SUMMARY
o

You have been invited to attend the June 1, 2010,


Deputy Ministers and Clerk meeting on international trade.
Briefing materials are not yet available from the lead department.
The following note provides some background information on the
status of various international negotiations and highlights some
possible interventions you may wish to make during the meeting.

Background
o

Expanding Canada's international trade agreements remains a


priority for this Government. Over the past year, the Government of
Canada has concluded, advanced or initiated several new
agreements, including with several of our major trading partners-

001039

Page 1040
is withheld pursuant to sections
est retenue en vertu des articles

14, 15(1)

of the Access to Information Act


de la Acces

a l'information

-3-

SECRET

5.15(1)

IGA Comments

During the recent economic downturn, many countries became


more protectionist, throwing up new barriers to international trade in
an effort to retain jobs locally. As Canada and the rest of the global
economy grow out of the recession, countries will look for new
economic opportunities, including those available through freer
international trade agreements. Financially and economically,
Canada is now well placed to negotiate new trade arrangements.

5.14

001041

-4-

SECRET

5.14
5.21 (1 )(a)

Natasha Rascanin
Attachment
Peters/Campbell/aw

001042

Page 1 of 1
s.20(1 )(c)
5.21 (1 )(b)
Vanstone, Melanie
From:

John.O'Neill@international.gc.ca

Sent:

May 27, 2010 3:52PM

To:

Michaei.Wylie@international.gc.ca; RChabot@edc.ca; CMarcotte@edc.ca;


John. Layton@fin.gc.ca; Philippe. Hall@fin.gc.ca; Tom. Rosser@N RCan-RNCan.gc.ca;
Mark.Boyland@NRCan-RNCan.gc.ca; Darcie.Booth@NRCan-RNCan.gc.ca; Paquet, MarieFrance; Vanstone, Melanie

Cc:

Aladin. Legaultd'Auteuil@international.gc.ca

Subject:
Attachments:

John O'Neill

2010-10-28

001043

Pages1044to/~1046

are withheld pursuant to sections


sont retenues en vertu des articles

20(1 )(a), 20(1 )(b), 23

of the Access to Information Act


de la Acces

l'information

Pages 1047 to I

a 1060

are withheld pursuant to sections


sont retenues en vertu des articles

20(1 )(b), 23

of the Access to Information Act


de la Acces

a l'information

Page 1 of3
5.14
5.23
Gilbert, Anne
From:

Hill, Patrick

Sent:

May 28, 2010 10:15 AM

To:

Gilbert, Anne

Subject:

FW: Abitibi

Attachments: FW: Nova Scotia Press Release

~-

Patrick Hill
Assistant Director 1 Directeur adjoint
Legal Operations 1 Operations juridiques/conseillers
Privy Council Office 1 Bureau du Conseil Prive
Ottawa, Canada K1A OA3

Telephone 1 Telephone 613-957-5777


Facsimile I Telecopieur 613-957-5032
Government of Canada 1 Gouvernement du Canada
From: Kate.Thompson@fin.gc.ca [mailto:Kate.Thompson@fin.gc.ca]
10:11 AM

Sent: May 28, 2010


To: Hill, Patrick
Subject: Abitibi

Patrick,

Kate Thompson
Counsel I Avocate
General Legal Services Division I Division des services juridiques generaux
Law Branch I Direction juridique
Department of Finance Canada I Ministere des Finances Canada
Ottawa, Canada K1A OG5
Kate.Thompsonfin.gc.ca
Telephone I Telephone 613-947-0724 I Facsimile I Telecopieur 613-944-5566 I
Teletypewriter I Teleimprimeur 613-995-1455

2010-05-28

001061

Page 1062
is withheld pursuant to sections
est retenue en vertu des articles

14,23

of the Access to Information Act


de la Acces

a l'information

s.23

Page 3 of3

Kate Thompson
Counsel I Advocate
General Legal Services Division I Division des services juridiques generaux
Law Branch I Direction juridique
Finance Canada I Finances Canada
Ottawa, Canada K1A OGS
613-947-0724 I Thompson.Katefin.gc.ca I facsimile/telecopieur 613-944-5566

2010-05-28

001063

Page 1 of 11

Gilbert, Anne
From:

Gilbert, Anne [Anne.Gilbert@pco-bcp.gc.ca]

Sent:

May 28, 2010 2:52 PM

To:

Gilbert, Anne

5.23

Subject:

From: Hill, Patrick


May 27, 2010 8:26 PM
To: Gilbert, Anne

Sent:

Subject:

From: Kate.Thompson@fin.gc.ca <Kate.Thompson@fin.gc.ca>


To: Hill, Patrick
Sent: Thu May 27 19:22:12 2010

Subject: I
Pat rick,

Kate Thompson
Counsel I Avocate
General Legal Services Division I Division des services juridiques gemeraux
Law Branch 1 Direction juridique
Department of Finance Canada 1 Ministere des Finances Canada
Ottawa, Canada K1A OG5
Kate.Thompson@fin.gc.ca
Telephone I Telephone 613-94 7-0724 I Facsimile 1 Telecopieur 613-944-5566 I Teletypewriter 1 Teleimprimeur
613-995-1455
Government of Canada 1 Gouvernement du Canada

I..L.1
~

Department of Finance
C8nada

Minfatere des Flna.nces


Canada

Canad

From: Hill, Patrick [mailto:Patrick.Hill@pco-bcp.gc.ca]


25,2010 1:32PM
To: Thompson, Kate

Sent: Tuesday,May

Subject: I
Dear Kate -

2010-05-31

001064

Page 1065
is withheld pursuant to section
est retenue en vertu de l'article

23
of the Access to Information Act
de la Acces

a l'information

Page 3 ofll

5.23

Many thanks -

Patrick Hill
Assistant Director 1 Directeur adjoint
Legal Operations 1 Operations juridiques/conseillers
Privy Council Office 1 Bureau du Conseil Prive
Ottawa, Canada K1A OA3

Telephone 1 Telephone 613-957-5777


Facsimile 1 Telecopieur 613-957-5032
Government of Canada 1 Gouvernement du Canada
From: Kate.Thompson@fin.gc.ca [mailto:Kate.Thompson@fin.gc.ca]
Sent: May 7, 2010 10:29 AM
To: Hill, Patrick
Subject:
Hi Patrick,

2010-05-31

001066

Page 4 ofll
Hope that helps. Let me know if you need anything further.

5.23

Kate Thompson
Counsel! Avocate
General Legal Services Division 1 Division des services juridiques generaux
Law Branch I Direction juridique
Department of Finance Canada 1 Ministere des Finances Canada
Ottawa, Canada K1A OG5
Kate.Thompson@fin.gc.ca
Telephone 1 Tehf!phone 613-947-0724 I Facsimile 1 Telecopieur 613-944-5566 I Teletypewriter 1
Teleimprimeur 613-995-1455
Government of Canada 1 Gouvernement du Canada

1.I

Deparlment of Finance
Canada

Minister. des Fl:na.ncu


Canada

Canad!l

From: Hill, Patrick [mailto:Patrick.Hill@pco-bcp.gc.ca]

Sent: May 6, 2010 5:32 PM


To: Thompson, Kate

Subject:

Many thanks

Patrick Hill
Assistant Director 1 Directeur adjoint
Legal Operations 1 Operations juridiques/conseillers
Privy Council Office 1 Bureau du Conseil Prive
Ottawa, Canada K1A OA3

Telephone 1 Telephone 613-957-5777


Facsimile 1 Telecopieur 613-957-5032
Government of Canada 1 Gouvernement du Canada
From: Hill, Patrick

Sent: May 6, 2010 5:31 PM


To: Gilbert, Anne
Cc: Smith, Robert

Subject: I

Patrick Hill

2010-05-31

001067

Page 5 of 11
Assistant Director 1 Directeur ad joint
Legal Operations 1 Operations juridiques/conseillers
Privy Council Office 1 Bureau du Conseil Prive
Ottawa, Canada K1A OA3

P..?t.r..i.G.k.JJ.i..l.l@p.QQ.::.b..GJ>..,.9.G.,. G.9..
Telephone 1 Telephone 613-957-5777
Facsimile 1 Telecopieur 613-957-5032
Government of Canada 1 Gouvernement du Canada
From: Gilbert, Anne

5.23

Sent: May 6, 2010 5:26 PM


To: Hill, Patrick
Cc: Smith, Robert

Subject:
Patrick,

Thanks,

An ne
From: Hill, Patrick

Sent: May 6, 2010 1:31 PM


To: Smith, Robert; Gilbert, Anne

Subject: r
FYI

Patrick Hill
Assistant Director I Directeur adjoint
Legal Operations I Operations juridiques/conseillers
Privy Council Office 1 Bureau du Conseil Prive
Ottawa, Canada K1 A OA3

Telephone 1 Telephone 613-957-5777


Facsimile 1 Telecopieur 613-957-5032
Government of Canada I Gouvernement du Canada
From: Rambod.Behboodi@fin.gc.ca [mailto:Rambod.Behboodi@fin.gc.ca]

Sent: May 6, 2010 1:30 PM


To: Hill, Patrick; Kate.Thompson@fin.gc.ca

Subject: - -

Thanks.

2010-05-31

001068

Page 6 ofll

5.23

Rambod Behboodi
General CDunsel and Executive Director I Avocat general et Directeur executif
General Legal Services I Services juridiques generaux
Department of Finance Canada I Ministere des Finances Canada
Ottawa, Canada K lA OG5
rambod.behboodi@ fin.gc.ca
Telephone I Telephone 613 995 8724 I Facsimile I Telecopieur 613 944 5566 I Teletypewriter
Telein1primeur 613-995-1455 I Blackberry613 894 5543

Government of Canada I Gouvemement du Canada

From: Hill, Patrick [mailto:Patrick.Hill@pco-bcp.gc.ca]

Sent: Thursday, May 06, 2010 11:57 AM


To: Behboodi, Rambod; Thompson, Kate

Subject: FW: .
Further info from DFAIT.

Patrick Hill
Assistant Director 1 Directeur adjoint
Legal Operations 1 Operations juridiques/conseillers
Privy Council Office 1 Bureau du Conseil Prive
Ottawa, Canada K1A OA3
patrick.hill@pco-bcp.gc.ca
Telephone 1 Telephone 613-957-5777
Facsimile 1 Telecopieur 613-957-5032
Government of Canada 1 Gouvernement du Canada
From: sylvie.tabet@international.gc.ca [mailto:sylvie.tabet@international.gc.ca]

Sent: May 4, 2010 10:04 PM


To: Hill, Patrick
Cc: Smith, Robert; Gilbert, Anne; Vanstone, Melanie

Subject:
Patrick,

2010-05-31

001069

s.23

Page 7 of11

Sylvie Tabet

From: Hill, Patrick <Patrick.Hill@pco-bcp.gc.ca>


To: Tabet, Sylvie -JLTB

Cc: Smith, Robert <Robert.Smith@pco-bcp.gc.ca>; Gilbert, Anne <Anne.Gilbert@pcobcp.gc.ca>; Vanstone, Melanie <Melanie.Vanstone@pco-bcp.gc.ca>
Sent: Tue May 04 10:48:57 2010
Subject: RE:

Patrick Hill
Assistant Director I Directeur adjoint
Legal Operations 1 Operations juridiques/conseillers
Privy Council Office 1 Bureau du Conseil Prive
Ottawa, Canada K1A OA3
patrick.hill@pco-bcp.gc.ca
Telephone 1 Telephone 613-957-5777
Facsimile 1 Telecopieur 613-957-5032
Government of Canada 1 Gouvernement du Canada
From: sylvie.tabet@international.gc.ca [mailto:sylvie.tabet@international.gc.ca]

Sent: May 3, 2010 11:15 PM


To: Hill, Patrick

Cc: Smith, Robert; Gilbert, Anne


Subject: R

2010-05-31

001070

Page 8 ofll

Sylvie Tabet

From: Hill, Patrick <Patrick.Hill@pco-bcp.gc.ca>


To: Tabet, Sylvie -JLTB
Cc: Smith, Robert <Robert.Smith@pco-bcp.gc.ca>; Gilbert, An ne <Anne.Gilbert@pco-bcp.gc.ca>

Sent: Mon May 03 09:38:45 2010


Subject: FW:
Dear Sylvie -

Many thanks

Patrick Hill
Assistant Director 1 Directeur adjoint
Legal Operations I Operations juridiques/conseillers
Privy Council Office I Bureau du Conseil Prive
Ottawa, Canada K1A OA3
patrick.hill@pco-bcp.gc.ca
Telephone 1 Telephone 613-957-5777
Facsimile 1 Telecopieur 613-957-5032
Government of Canada I Gouvernement du Canada
From: Rambod.Behboodi@fin.gc.ca [mailto:Rambod.Behboodi@fin.gc.ca]

Sent: April 30, 2010 6:01 PM


To: Hill, Patrick; Kate.Thompson@fin.gc.ca
Cc: Smith, Robert; Gilbert, Anne; Vanstone, Melanie
Subject: RE:

Dear Patrick

2010-05-31

001071

Page 9 of11

if you have any questions.

5.23

Rambod Behboodi
General Counsel and Executive Director I Avocat general et Directeur executif
General Legal Services I Services juridiques generaux
Department of Finance Canada I Ministere des Finances Canada
Ottawa, Canada KlA OG5
rambod.behboodi@ fin.gc.ca
Telephone 1 Telephone 613995 8724/ Facsimile I Telecopieur 613 944 5566/
Teletypewriter I Teleimprimeur 613-995-1455/ Blackberry 613 894 5543
Government of Canada I Gouvemement du Canada

From: Hill, Patrick [mailto:Patrick.Hill@pco-bcp.gc.ca]

Sent: Wednesday, April 28, 2010 11:49 AM


To: Behboodi, Rambod; Thompson, Kate
Cc: Smith, Robert; Gilbert, Anne; Vanstone, Melanie
Subject:
Dear Rambod and Kate -

2010-05-31

001072

Page 1073
is withheld pursuant to section
est retenue en vertu de l'article

23
of the Access to Information Act
de la Acces

a l'information

s.23

Page 11 ofll

Best regards,

Patrick Hill
Assistant Director 1 Directeur adjoint
Legal Operations 1 Operations juridiques/conseillers
Privy Council Office 1 Bureau du Conseil Prive
Ottawa, Canada K1A OA3
patrick.hill@pco-bcp.gc.ca
Telephone 1Telephone 613-957-5777
Facsimile 1 Telecopieur 613-957-5032
Government of Canada 1 Gouvernement du Canada

2010-05-31

001074

Pages 1075 to I

a 1078

are withheld pursuant to sections


sont retenues en vertu des articles

14,23

of the Access to Information Act


de la Acces

a l'information

Pages 1079 to I

a 1082

are withheld pursuant to section


sont retenues en vertu de l'article

68(a)

of the Access to Information Act


de la Acces

a l'information

Page 1 of2
s.21 (1 )(b)
s.21 (1 )(c)
Vanstone, Melanie
From:

Vanstone, Melanie

Sent:

June 15, 2010 5:24 PM

To:

'John.O'Neill@international.gc.ca'; Emmanuei.Kamarianakis@international.gc.ca

Cc:

Dean.Beyea@fin.gc.ca

Subject: RE: next steps

From: John.O'Neill@international.gc.ca [mailto:John.O'Neill@international.gc.ca]

Sent: June 15, 2010 5:23 PM


To: Vanstone, Melanie; Emmanuei.Kamarianakis@international.gc.ca
Cc: Dean.Beyea@fin.gc.ca
Subject: RE: next steps
Melanie,

John

From: Vanstone, Melanie

[mailto:Melanie.Vanstone@pco~bcp.gc.ca]

Sent: June 15, 2010 5:09 PM


To: Kamarianakis, Emmanuel
Cc: Dean.Beyea@fin.gc.ca
Subject: next steps

~DMT;

O'Neill, John

~TBI

2010-10-28

001083

Page 2 of2
Thanks

Melanie Vanstone
Analyst I Analyste
Economic and Regional Development Policy I
Politique du developpement economique et regional
Privy Council Office I Bureau du Conseil prive
85 Sparks Street I 85 rue Sparks
Ottawa, Ontario, K1A OA3
melan ie. vanstone@pco-bcp. gc. ea
telephone I telephone 613-957-5447
facsimile I telecopieur 613-957-5007
Government of Canada I Gouvernement du Canada

2010-10-28

001084

Page 1 ofl
s.19(1)

Vanstone, Melanie
From:

Vanstone, Melanie

Sent:

June 16, 2010 9:38AM

To:

Sargent, Timothy

s.20(1 )(c)
s.21 (1 )(c)

Subject: Fw: DMT call with AB

Sent from my BlackBerry Wireless Hand held

From: Emmanuel. Kamarianakis@international.gc.ca < Emmanuei.Kamariana kis@international.gc.ca>


To: John.O'Neill@international.gc.ca <John.O'Neill@international.gc.ca>; Vanstone, Melanie
Cc: Laurent.Cardinal@ international.gc.ca < Laurent.Cardinal@international.gc.ca>;
sylvie.tabet@international.gc.ca <sylvie.tabet@international.gc.ca>; Michaei.Wylie@international.gc.ca
<Michaei.Wylie@international.gc.ca>; Aladin.Legaultd'Auteuil@international.gc.ca
<Aiadin.Legaultd'Auteuil@international.gc.ca>
Sent: Wed Jun 16 09:33:55 2010
Subject: DMT call with AB

2010-10-28

001085

Pages 1086 to I

a 1087

are withheld pursuant to section


sont retenues en vertu de l'article

23
of the Access to Information Act
de la Acces

a l'information

s.21 (1 )(b)

Page 1 of2

s.21 (1 )(c)

Vanstone, Melanie
From:

John.O'Neill@international.gc.ca

Sent:

June 17,2010 7:30AM

To:

Vanstone, Melanie

Subject:

RE: AB - draft letter

Attachments: Letter to AB June 16.pdf


yes it did -see attached
John

From: Vanstone, Melanie [mailto:Melanie.Vanstone@pco-bcp.gc.ca]


Sent: June 17, 2010 7:16AM
To: O'Neill, John -TBI
Subject: Re: AB- draft letter
Hi John
Do you know if the letter went out last night?
Sent from my BlackBerry Wireless Handheld

From: John.O'Neill@international.gc.ca <John.O'Neill@international.gc.ca>


To: Vanstone, Melanie
Sent: Wed Jun 16 17:57:41 2010
Subject: FW: AB - draft letter
Melanie,

John O'Neill
944-2427
852-2871

From: Vanstone, Melanie [mailto:Melanie.Vanstone@pco-bcp.gc.ca]


Sent: June 16, 2010 9:47 AM
To: O'Neill, John -TBI
Cc: Kamarianakis, Emmanuel -DMT
Subject: FW: AB- draft letter

2010-10-28

001088

Page 2 of2
Here are some comments from PCO on the letter.
Thanks
Melanie Vanstone
mela_nie. '1/__ll.tone@QCO.:-~G.,..g_~
613-957-5447
From: John.O'Neill@international.gc.ca [mailto:John.O'Neill@international.gc.ca]

Sent: June 15, 2010 5:49 PM


To: Emmanuel. Kamarianakis@ international.gc.ca

Cc: Vanstone, Melanie; Dean.Beyea@fin.gc.ca; John.Layton@fin.gc.ca; sylvie.tabet@international.gc.ca;


Michaei.Wylie@international.gc.ca; Aladin.Legaultd'Auteuil@international.gc.ca;
Laurent.Cardinal@international.gc.ca
Subject: AB - draft letter
Attached is a draft letter vetted by JLT
John O'Neill
Director 1 Directeur
Investment Trade Policy 1 Politique commerciale sur l'investissement (TBI)
Foreign Affairs and International Trade Canada 1 Affaires etrangeres et Commerce international Canada
Government of Canada 1 Gouvernement du Canada
Tel: 613 944-2427

2010-10-28

001089

Page 1090
is withheld pursuant to section
est retenue en vertu de l'article

23
of the Access to Information Act
de la Acces

a l'information

German firm wants Abitibi mill: N.L. minister

Page 1 of 1

Vanstone, Melanie
From:

Vanstone, Melanie

Sent:

June 25, 2010 7:42 AM

To:

Gilbert, Anne

Cc:

Paquet, Marie-France

Subject: Fw: CBC --German firm wants Abitibi mill: N.L. minister

s.21 (1 )(b)

Sent from my BlackBerry Wireless Handheld

From:

s.19(1)

Sent: Fri Jun 25 07:38:23 2010


Subject: CBC --German firm wants Abitibi mill: N.L. minister

cbc.ca

German firm wants Abitibi mill:


N. L. minister
By CBC News
CBC News

A German company is hoping of take control of the former AbitibiBowater paper mill in central
Newfoundland, Natural Resources Minister Kathy Dunderdale revealed in the house of
assembly Thursday afternoon. Responding to questions in the legislature, Dunderdale said
Lott Paper is working with the government in hopes of acquiring the ...
Click here to view this content.
Sign Up for Clip&Copy to find other content like this. it's a free personalized news alert and
press clippings service.

CBC News 2010


Powered by iCopyrightcom.

2010-10-28

001091

Page 1 of2

Van5tone, Melanie
From:

Vanstone, Melanie

Sent:

June 25, 2010 8:49AM

To:

Emmanuei.Kamarianakis@international.gc.ca; 'Michaei.Wylie@international.gc.ca'

Cc:

John.O'Neill@international.gc.ca

Subject: News on AB's former NL mill

5.14

_http://www. cbc. ea/ea nada/n ewfou nd land -la brad or/sto ry/2 0 10/06/24/germ an -Qompa ny -wants-n 1-paper-m ill624.html

5.21 (1 )(a)

Thanks

German firm wants Abitibi mill: N.L. minister


By CBC News
CBC News

A German company is hoping of take control of the former AbitibiBowater paper mill in
central Newfoundland, Natural Resources Minister Kathy Dunderda/e revealed in the
house of assembly Thursday afternoon.
A German company is hoping of take control of the former AbitibiBowater paper mill in central
Newfoundland, Natural Resources Minister Kathy Dunderdale revealed in the house of assembly Thursday
afternoon.
Responding to questions in the legislature, Dunderdale said Lott Paper is working with the government in
hopes of acquiring the Grand Falls-Windsor mill that closed in February 2009.
Dunderdale told the house she had received a formal business plan, but clarified to reporters afterward that
the government had actually received a letter of intent with a fair level of detail. Dunderdale said she expects
a business plan by Monday, but cautioned the proposal is far from a done deal.
"This is something that we are very cautious about," Dunderdale said.
"There are not many companies in the world today looking to get into the pulp and paper industry, and that
is something that we are going to spend a lot of time analyzing."
No specifics about the negotiations were released, but Dunderdale said Lott's general plan is to buy the mill
and use the local wood supply to feed its paper machines. The Ministry of Natural Resources, and the
finance and business departments are all involved in the process, she said.
A delegation from the company visited the mill, which mainly produced newsprint, earlier this spring.
According to its website Lott Paper, based in Germany and Austria, specializes in fine and hard cardboard,
and has a staff of 100 employees.

2010-10-28

001092

Page 2 of2

Blank Page 11 Page


blanche

2010-10-28

001093

Page 1 of 1

5.13(1)
5.14
5.19(1)

Vanstone, Melanie

-------..

--~---------l;":Z1(1j(t)T~-------~--.

From:

Vanstone, Melanie

Sent:

August 4, 2010 6:03PM

To:

Sargent, Timothy; Paquet, Marie-France

-~-~~-

5.21 (1 )(c)

Subject: FW: ENEL and Newfoundland


FYI -this is regarding ENEL, which was AbitibiBowater's partner in the NL hydro facility.

From: John.O'Neill@international.gc.ca [mailto:John.O'Neill@international.gc.ca]

Sent: August 4, 2010 5:47 PM


To: Patrizia.Giuliotti@international.gc.ca; Khawar.Nasim@international.gc.ca; Vanstone, Melanie
Cc: Michaei.Wylie@international.gc.ca; Aladin.Legaultd'Auteuil@international.gc.ca;
Brian.Parrott@international.gc.ca; Martine.Moreau@international.gc.ca; John.Kur@international.gc.ca;
Emmanuei.Kamarianakis@international.gc.ca; Elaine.Brouca@international.gc.ca;
Danielle.Thibault@international.gc.ca; Martine.Moreau@international.gc.ca;
Marion.Thompson@international.gc.ca; sylvie.tabet@international.gc.ca; Christophe.Bondy@international.gc.ca;
James.Fox@international.gc.ca; Don.Stephenson@international.gc.ca; Laurent.Cardinal@international.gc.ca
Subject: ENEL and Newfoundland

John O'Neill
Director 1 Directeur
Investment Trade Policy 1 Politique commerciale sur l'investissement (TBI)
Foreign Affairs and International Trade Canada 1 Affaires etrangeres et Commerce international Canada
Government of Canada 1 Gouvernement du Canada
Tel: 613 944-2427

2010-10-28

001094

s.14

Page 1 of3

s.21 (1 )(b)

Vanstone, Melanie
From:

Christophe. Bondy@international.gc.ca

Sent:

August 11, 2010 3:48 PM

To:

Vanstone, Melanie; Hill, Patrick

Cc:

John.O'Neill@international.gc.ca; sylvie.tabet@international.gc.ca

s.21 (1 )(c)

Subject: RE: AbitibiBowater

Melanie,

2010-10-28

001095

s.21 (1)(c)

s.21(1)(c)Page 2 of3
s.23

Kind regards
Christophe

From: Vanstone, Melanie [mailto:Melanie.Vanstone@pco-bcp.gc.ca]

Sent: August 11, 2010 2:14PM


To: Bondy, Christophe -JLTB; Hill, Patrick
Cc: O'Neill, John -TBI; Tabet, Sylvie -JLTB
Subject: RE: AbitibiBowater
Hi Christophe

s.23

Many thanks
Melanie Vanstone
melanie.vanstone@pco-bcp.gc.ca

613-957-5447

From: Christophe.Bondy@international.gc.ca [mailto:Christophe.Bondy@international.gc.ca]

Sent: August 11, 2010 2:10PM


To: Hill, Patrick
Cc: Vanstone, Melanie; John.O'Neill@international.gc.ca; sylvie.tabet@international.gc.ca
Subject: AbitibiBowater
Patrick,

s.23

2010-10-28

001096

Page 3 of3

Regards
Christophe

Christophe Douaire de Bondy


Deputy Director / Directeur adjoint
Trade Law Bureau /
Direction generate du droit commercial international (JLTB)
Departments ofJustice and of Foreign Mfairs and International Trade/
Departements de la Justice et des Affaires Etrangeres et du Commerce International
125 Sussex
Ottawa, Ontario
CANADA KlA OG2
T 613-995-7245
F 613-944-5857
christophe.bondy@international.gc.ca

2010-10-28

001097

Page 1 of2

h .. !, Patrick
From:

Vanstone, Melanie

Sent:

August 11, 2010 10:33 AM

To:

Hill, Patrick

..

"'

""'KQOO-u
Original:.::>
~ ' 'I~- cr---.
Copies:------

5.14

Subject: FW: AbitibiBowater

tdent:JA..

5.21 (1 )(b)

s:23
From: John.O'Neill@international.gc.ca [mailto:John.O'Neill@international.gc.ca]
Sent: August 10, 2010 7:01 PM
To: Vanstone, Melanie
Cc: Emmanuei.Kamarianakis@international.gc.ca; Aladin.Legaultd'Auteuil@international.gc.ca
Subject: AbitibiBowater
Melanie,
As per our conversation earlier today, here is some of the information that you requested. The communications
plan, including media lines and Qs&As, is being finalized and I will forward it to you as soon as possible (hopefully
tomorrow).

2010-08-12

001098

5.13(1)( 5.14(a

5.20(1)(

5.21(1)(

5.23

Page 2 of2

John O'Neill
Director I Directeur
Investment Trade Policy 1 Politique commerciale sur l'investissement (TBI)
Foreign Affairs and International Trade Canada I Affaires etrangeres et Commerce international Canada
Government of Canada I Gouvernement du Canada
Tel: 613 944-2427

2010-08-12

001099

s.14

Page 1 of3

s.21 (1 )(b)
, -~, Patrick

s.21 (1 )(c)

'cwmm~~mm"~:.~~om ~ c~~~

From:

Vanstone, Melanie

Sent:

August 11, 2010 3:57PM

To:

'Christophe.Bondy@international.gc.ca'; Hill, Patrick

Cc:

John. O'Neill@international. gc.ca; sylvie. tabet@international.ge. ea

mwm

Copies:------

Subject: RE: AbitibiBowater


This is very helpful. Thanks again.

fdent:

Melanie

From: Christophe.Bondy@international.gc.ca [mailto:Christophe.Bondy@international.gc.ca]

Sent: August 11, 2010 3:48 PM

To: Vanstone, Melanie; Hill, Patrick


Cc: John.O'Neill@international.gc.ca; sylvie.tabet@international.gc.ca

Subject: RE: AbitibiBowater


Melanie,

2010-08-11

001100

Page 2 of3

Kind regards

5.14
Christophe

5.21 (1 )(b)
5.23

From: Vanstone, Melanie [mailto:Melanie.Vanstone@pco-bcp.gc.ca]

Sent: August 11, 2010 2:14PM


To: Bendy, Christophe -JLTB; Hill, Patrick
Cc: O'Neill, John -TBI; Tabet, Sylvie -JLTB
Subject: RE: AbitibiBowater
Hi Christophe

Many thanks
Melanie Vanstone
mill9DL~xanston~@Q9_Q-:_bcp.g_c.ca

613-957-544 7
From: Christophe.Bondy@international.gc.ca [mailto:Christophe.Bondy@international.gc.ca]

Sent: August 11, 2010 2:10 PM


To: Hill, Patrick
Cc: Vanstone, Melanie; John.O'Neill@international.gc.ca; sylvie.tabet@international.gc.ca
Subject: AbitibiBowater

Patrick,

2010-08-11

001101

s.23

Page 3 of3

Please let me know if you have any questions.


Regards
Christophe

Christophe Douaire de Bondy


Deputy Director I Directeur adjoint
Trade Law Bureau I
Direction generale du droit commercial international (JLTB)
Departments of Justice and of Foreign Mfairs and International Trade I
Departements de la Justice et des Mfaires Etrangeres et du Commerce International
125 Sussex
Ottawa, Ontario
CANADA KlA OG2
T 613-995-7245
F 613-944-5857
christophe.bondy@international.gc.ca

2010-08-11

001102

s.19(1)

Page 1 of2

s.20(1 )(b)
Vanstone, Melanie
From:

Vanstone, Melanie

Sent:

August 16, 2010 12:51 PM

To:

Sargent, Timothy

Subject:

FW:

s.20(1 )(c)
s.21 (1 )(b)

Attachments:

FYI-

From: John.O'Neill@international.gc.ca [mailto:John.O'Neill@international.gc.ca]

Sent: August 16, 2010 12:11 PM


To: sylvie.tabet@international.gc.ca; Emmanuei.Kamarianakis@international.gc.ca;
Darrel. Houlahan@international.gc.ca; Vanstone, Melanie
Subject: FW:

John O'Neill

From:

Sent: August 16, 2010 11:27 AM


To: O'Neill, John -TBI
Cc: Mckay, Laurie -TBI; I

Subject:

Vous pouvez imprimer ce courriel. Le papier est issu d'une ressource renouvelable. Veuillez choisir du papier
provenant de forets durables certifiees par des tiers et recyclez-le. Pour plus d'information, visitez
www.abitibibowater.com/imprimer.

2010-10-28

001103

Page 2 of2
lt's OK to print this e-mail. Paper is made from a renewable resource. Please choose paper sourced from
independently certified sustainable forests and recycle. For more information visit www.abitibibowater.com/print.

2010-10-28

001104

Pages 11 05 to I

a 11 06

are withheld pursuant to sections


sont retenues en vertu des articles

20(1 )(b), 20(1 )(c)

of the Access to Information Act


de la Acces

a l'information

5.20(1)(b)

Page 1 of2

5.20(1 )(c)

Vanstone, Melanie
From:

Vanstone, Melanie

Sent:

August 16, 2010 1:35PM

To:

Hill, Patrick; Swan, Graham

5.21 (1 )(b)

Subject: RE:

Melanie Vanstone
!Il~).!}j..,_'L<3_DStpne@pco-Q~MQ.,~~

613-957-544 7

From: Hill, Patrick

Sent: August 16, 2010 1:34PM


To: Vanstone, Melanie; Swan, Graham
Subject: RE:

Patrick Hill
Assistant Director I Directeur adjoint
Legal Operations 1 Operations juridiques/conseillers
Privy Council Office 1 Bureau du Conseil Prive
Ottawa, Canada K1A OA3
patrick.hill@pco-bcp.gc.ca
Telephone 1 Telephone 613-957-5777
Facsimile 1 Telecopieur 613-957-5032
Government of Canada I Gouvernement du Canada
From: Vanstone, Melanie

Sent: August 16, 2010 1:15PM


To: Swan, Graham; Hill, Patrick
Subject:

Melanie Vanstone
melanie. vansto!J..@p~o-bcp.Q_Q_. ea
613-957-544 7

From: John.O'Neill@international.gc.ca [mailto:John.O'Neill@international.gc.ca]


Sent: August 16, 2010 12:11 PM
To: sylvie. tabet@international.gc.ca; Emmanuei.Kamarianakis@international.gc.ca;
Darrei.Houlahan@international.gc.ca; Vanstone, Melanie
Subject: FW: I

2010-10-28

001107

s.21(1 )(b)

Page 2 of2

John O'Neill

From:.

Sent: August 16, 2010 11:27 AM


To: O'Neill, John -TBI
Cc: Mckay, Laurie -TBI;
Subject:

s.19(1)
s.20(1 )(b)
s.20(1 )(c)

2010-10-28

001108

Nfld and ENEL

s.13(1)(c)

Page 1 of 1

s.14(a)
s.21 (1 )(c)
Vanstone, Melania
From:

John.O'Neill@international.gc.ca

Sent:

August 18, 2010 12:56 PM

To:

Don.Stephenson@international.gc.ca; Laurent.Cardinal@international.gc.ca;
Emmanuei.Kamarianakis@international.gc.ca; Arun.Aiexander@international.gc.ca; Vanstone,
Melanie

Cc:

Aladin.Legaultd'Auteuil@international.gc.ca; Megan.Ciifford@international.gc.ca; Jonathan.JasminBenoit@international.gc.ca

Subject: Nfld and ENEL

John

Sent from handheld wireless device


John O'Neill

2010-10-28

001109

Page 1 of2

Vanstone, Melanie
From:

sylvie.tabet@international.gc.ca

Sent:

August 18, 2010 2:12PM

5.19(1)

To:
Christophe. Bondy@international.gc.ca;

Cc:
Subject: RE:

5.23
Sylvie

Sylvie T abet
Ccncml Coun$d &. Director j .:\vocatc gc~n{?rale et directrice
Trade Law Bureau (JLT) I Direction generak~ du droit commercial (IL'I)
rd 1 rd: + 1 6L\.944.15tJI)
Fax 1 tek~c: + 1 6Li.944JJ027 I +1 613.944.3~Li
svlvie.tabet@international.gc.ca

Foreign Affairs a.nd International Trade C:mad


i\ffaircs t~tnngeres et Commerce intcmational
c~Ul;lda

Department of Justice I \linistere de laJustic{


Government of Canada I Gouvemement du
Canada
f~difice L.ester B Pearson Building
125. promenade Su~sex Drive
Ottawa ()N KlA OG2
Ci\N;\DA

From:
Sent: August 18, 2010 12:03 PM
To: Tabet. Svlvie -JLTB
Cc:

5.19(1)
Bandy, Christophe -JLTB;

<alicki, Jean
Subject:
Sylvie --

5.20(1 )(b)

Regards,

5.19(1)

2010-10-28

001110

Page 1111
is withheld pursuant to sections
est retenue en vertu des articles

19(1 ), 20(1 )(b)

of the Access to Information Act


de la Acces

a l'information

Page 1 of2

5.19(1)

Vanstone, Melanie

5.20(1 )(b)

From:

sylvie.tabet@international.gc.ca

Sent:

August 18, 2010 2:37 PM

5.20(1 )(c)

To:

John.O'Neill@international.gc.ca; Emmanuei.Kamarianakis@international.gc.ca;
Arun.Aiexander@international.gc.ca; Vanstone, Melanie

5.20(1 )(d)

Cc:

Don.Stephenson@international.gc.ca; Laurent.Cardinal@international.gc.ca

5.23

Subject:
Attachments:

Sylvie T abet
General Counsel & DirccJor j ,\vocai:e gt;nerale et direct1ice
'ftade Law Bureau (]LT) I Direction gi:neralc du droit commercial (]LT)
Id I r.d: + 1 6!3.944.15<JO
Fax I tekc: + 1 (il3.944.fl(J:27 1 + l. G13.lJ44.32l.3
svlvie. tabet@international.gc.ca

Foreign i\ff~tirs and International Trade Canad


Affaires <:trangeres et Commerce international
Canada
Dep:trtment of Justice I Ministere de la Justice
Government of Canada I Gouvemement du
Cm:tda

r::difice Lester B Pearson Building


125, promenade SuS$CX Drive
Otta\va ON KL\ OG2
CAN . \D . \

2010-10-28

001112

Page 1113
is withheld pursuant to sections
est retenue en vertu des articles

19(1 ), 20(1 )(b)

of the Access to Information Act


de la Acces

a l'information

Pages 1114 to I

a 1121

are withheld pursuant to sections


sont retenues en vertu des articles

20(1 )(b), 20(1 )(c), 20(1 )(d)

of the Access to Information Act


de la Acces

a l'information

s.14

Vanstone, Melanie
From:

Aladin.Legaultd'Auteuil@international.gc.ca

Sent:

August 18, 2010 2:45PM

To:

Vanstone, Melanie; John.O'Neill@internationaf.gc.ca

Cc:

Laurie. Mckay@internationaf.gc.ca; Megan. Clifford@international. gc. ea

Page 1 of2

s.21 (1 )(b)

Subject: FW:

Hi Melanie, Hi John,

Melanie: are you preparing a briefing note?


Thanks,
Aladin

944-8976

From: Drago, Alexandre -PRP

Sent: August 18, 2010 2:18 PM


To: Legault d' Auteuil, Aladin -TBI

Subject: FW:
Salut A!adin,

Alexandre

From: Marcellus, Christopher -DCB

Sent: August 18, 2010 12:54 PM


To: *PRP
Cc: EXTOTI (PRP); EXTOTI (PRO); Vezina-Gagnon, Colette -DMT; Beaulieu, Vincent -DCB; Belanger, Genevieve
-DCB; Bornstein, Michael -DCB; Chartrand Pigeon, Johanne -DCB; EXTOTI (DCB); McGrath, Joanna -DCB

Subject:
Importance: High

Please forward the meeting note directly to o/USS for approval.

2010-11-26

001122

Page 2 of2
BPTS number: 02301-2010
Please use the attached meeting note template. The meeting note should be provided in: English.
Departmental Representative Requested: No
For information on meeting note preparation, please refer to the Corporate Secretariat (DCD) intranet site at:

Please ensure that appropriate consultation has taken place as necessary. All consulted divisions or
organizations should be clearly indicated.
For questions about the assignment of this note, please feel free to contact me directly at

943-4884.

Christopher Marcellus - DCB (82- 193)


Tracking Officer I Agent de suivi
Executive Briefing Services Division I Direction des Services de breffage executif
Foreign Affairs and International Trode Canada I Affaires etrangeres et Commerce International Canada
125 Sussex Drive, Ottawa, Ontario

KlA OG2
Tel613.943.4884
eh ritopher. rna re ell us(a) international. gc. ea

2010-11-26

001123

Page 1 of2

Newspaper Details
Publication Date:
Illustration:
Page:
Byline:
Source:
Word Count:

Edition:
Section:
Business
Column:
B4
Ross Marowits THE CANADIAN PRESS Dateline:
Copyright:
Telegraph-Journal (NB)
2010/08/19

565

N.L. moves to appeal Abitibi cleanup ruling to Supreme


Court
MONTREAL- The Newfoundland and Labrador government is appealing a Quebec court ruling
on the environmental mess left by insolvent paper company AbitibiBowater to the Supreme
Court of Canada.
The province said the country's top court needs to determine key issues of public importance
related to the CCAA process.
It wants to know if a debtor's statutory duty to remove environmental contamination is
"extinguished" under the Companies' Creditors Arrangement Act like a commercial debt, it
said in a notice of application.

The move to seek leave to appeal a Quebec Superior Court ruling comes about three months
after the Quebec Court of Appeal refused to hear the case.
Newfoundland and Labrador said the case raises three specific issues:

* ensuring consistency across the country by resolving a conflict between provincial


environmental law and federal bankruptcy and insolvency law;

* who should bear the cleanup costs when a company is attempting to restructure;
* does the CCAA give a court power to remove all hurdles under provincial law that impair a
company's ability to restructure.
Newfoundland Premier Danny Williams promised in May to take the case to the high court
after he conceded the province would likely have to clean up the multimillion dollar mess left
by the Montreal based newsprint giant.
The province wants to force Abitibi to clean up five sites it ran between 1905 and 2008. They
include a defunct Grand Falls Windsor paper mill in central Newfoundland that the government
expropriated in December 2008.
The province rushed through legislation to seize Abitibi timber and water rights, along with a
hydroelectric power station, after the failing company announced it was closing the paper mill.
Williams has blamed a bureaucratic foul up for the accidental seizure of the mill and its
cleanup costs.
He accused the Quebec courts of "bias" for being fixated on having Abitibi restructure.
In its notice seeking to appeal the Quebec court ruling, Newfoundland and Labrador called
industrial pollution one of the scourges of the modern age.
At the heart of all legislation designed to redress the effects of pollution is the "polluter pay"
principle requiring those responsible for cleaning it up.

http://mediaportal/Common/Viewer .aspx?SourceType= 1&ID=844 3851 &DoeID=Docld...

201 0-08-1 9

001124

Page 2 of2

"This point of this principle is to ensure that governments are not left footing the bill," it said,
noting that the principle has been endorsed by the Supreme Court.
AbitibiBowater declined to comment on the province's latest legal manoeuvre.
The company's creditors are set to vote on a restructuring plan on Sept. 14 that would allow
the company to exit court protection in mid October.
AbitibiBowater reined in its losses in the second quarter, reducing its red ink to US$297
million in the three month period ended June 30, compared with $510 million in the same
year ago quarter.
Revenues grew 14 per cent to US$1.18 billion from US$1.04 billion on higher prices for paper,
pulp and wood products, though the results were negatively affected by lower prices for
specialty papers.
The company has been under protection from creditors since April 2009.
It has cut 6,000 employees and dramatically reduced its paper and wood capacity as it
prepares to exit creditor protection as a lower cost producer better able to absorb market and
currency fluctuations.

http://mediaportal/Common/Viewer.aspx?SourceType= 1&ID=8443851 &DociD=Docld...

2010-08-19

001125

Page 1 ot 1
5.14
Vanstone, Melanie

5.15(1)

s.21 ( 1)(a)
From:

Vanstone, Melanie [Melanie.Vanstone@pco-bcp.gc.ca]

Sent:

August 20, 2010 10:24 AM

To:

Vanstone, Melanie

5.21 (1 )(b)
5.21 (1 )(c)

Subject: FW: AbiBo TPs

Melanie Vanstone
melanie. vanston~o-bcp_,_gc.ca
613-957-544 7

From: John.O'Neill@international.gc.ca [mailto:John.O'Neill@international.gc.ca]

Sent: August 18, 2010 10:00 AM


To: Vanstone, Melanie
Cc: Aladin.Legaultd'Auteuil@international.gc.ca
Subject: AbiBo TPs
as requested:

2010-10-28

001126

Page 2 ot2

5.14
5.15(
5.21 (1 )(
John O'Neill
Director 1 Directeur
Investment Trade Policy 1 Politique commerciale sur l'investissement (TBI)
Foreign Affairs and International Trade Canada 1 Affaires etrangeres et Commerce international Canada
Government of Canada 1 Gouvernement du Canada
Tel: 613 944-2427

5.21 (1 )(
5.21 (1 )(

2010-10-28

001127

s.14

Page 1 of2

s.21 (1 )(a)

Vanstone, Melania
From:

Swan, Graham

Sent:

August 20, 2010 12:24 PM

To:

Vanstone, Melanie

Subject:

RE: AbiBo TPs

s.21 (1 )(b)
s.21 (1 )(c)

Attachments: PCO_PROD-#550134-v1-PM_Talking_points_for_Williams_Abitibi. DOC

Thanks
Graham Swan
Director Generai/Directeur general
gswan@pco-bcp.gc.ca
Telephone/telephone 613-943-2097
Privy Council Office, 66 Slater Street, Ottawa
Ontario K1A OA3
Bureau du Conseil prive, 66 rue Slater, Ottawa
Ontario K1A OA3
Government of Canada/Gouvernement du Canada

From: Vanstone, Melanie

Sent: August 20, 2010 10:31 AM


To: Swan, Graham

Subject: FW: AbiBo TPs


Here are the points as they came in from DFAIT in case this is of help in drafting the note. I'll be reworking them

a bit.
From: John.O'Neill@international.gc.ca [mailto:John.O'Neill@international.gc.ca]

Sent: August 18, 2010 10:00 AM


To: Vanstone, Melanie
Cc: Aladin.Legaultd'Auteuil@international.gc.ca

Subject: AbiBo TPs


as requested:

2010-10-28

001128

Page 2 of2
5.14
5.15(1)
5.21 (1 )(a)
5.21 (1 )(b)
5.21 (1 )(c)

John O'Neill
Director 1 Directeur
Investment Trade Policy 1 Politique commerciale sur l'investissement (TBI)
Foreign Affairs and International Trade Canada 1 Affaires etrangeres et Commerce international Canada
Government of Canada 1 Gouvernement du Canada
Tel: 613 944-2427

2010-10-28

001129

Pages 1130 to I

a 1131

are withheld pursuant to section


sont retenues en vertu de l'article

14

of the Access to Information Act


de la Acces

a l'information

Page 1132
is withheld pursuant to sections
est retenue en vertu des articles

14, 20(1 )(d)

of the Access to Information Act


de la Acces

a l'information

Page 1 of 1

Vanstone, Melanie
From:

Swan, Graham

Sent:

August 20, 2010 12:43 PM

To:

Vanstone, Melanie

Subject:

PM Talking points for Williams Abitibi

Attachments: PCO_PROD-#550134-v1-PM_Talking_points_for_Williams_Abitibi. DOG

Revised as per our discussion

2010-10-28

001133

Page 1 of3

From:

Vanstone, Melanie

Sent:

August 23, 2010 8:14PM

To:

Graham, Diana; Hill, Patrick; Boyer, Nicolas; Coleman, Ralph; Hermanutz, Derek

Cc:

Massey, Jonathan

5.21 (1 )(

Subject: Re: URGENT- NEW PRODUCTS: ABitibi

Look forward to hearing comments from others.


Sent from my BlackBerry Wireless Handheld

From: Graham, Diana


To: Hill, Patrick; Vanstone, Melanie; Boyer, Nicolas; Coleman, Ralph; Hermanutz, Derek
Cc: Massey, Jonathan
Sent: Mon Aug 23 18:30:25 2010
Subject: URGENT - NEW PRODUCTS: ABitibi

5.21 (1 )(b)

Hi all,

THanks,
Diana

From: Vanstone, Melanie

Sent: August 23, 2010 6:03PM


To: Graham, Diana

2010-10-28

001134

Page 2 of3
Subject: FW: ABitibi
Diana

FYI CJ I will be off line between 6:45 and 7:45, but will otherwise be monitoring my bb.
Thanks
Melanie

From: Houlahan, Darrel -CMC

Sent: August 23, 2010 4:59 PM


To: O'Neill, John -TBI; Legault d' Auteuil, Aladin -TBI; Clifford, Megan -TBI
Subject: FW: ABitibi

5.21 (1 )(b)

From: Houlahan, Darrel -CMC

Sent: August 23, 2010 4:53 PM


To: 'Graham, Diana'
Cc: Galarneau, Sophie -CMR; Beck, Brenda -CMC
Subject: FW: ABitibi
OK, update:

Thanks,
Darrel

From:

Sent: August 23, 2010 4:39 PM


To: Bec,k, Brenda -CMC; Houlahan, Darrel -CMC

5.19(1)

Cc: Galarneau, Sophie -CMR; Lanteigne, Andre-Marc -CSM;


Subject: ABitibi
Attached are the following products:

2010-10-28

001135

Page 3 of3
Statement
Media Lines
Backgrounders (Time lines and facts and figures)
Q&A
Thanks

5.19(1)

1.1
.

Fol'eignAtfalrsand

lntematooaiTrade Canada

Affairesetranaera$et

Commerce infernationai Canada

r'l;...-......
~.
\....Jdl

J.W.Ja

2010-10-28

001136

5.14
5.21 (1 )(b)

Government of Canada
Privy Council Office

Gouvernement du Canada
Bureau du Conseil prive

Ottawa, Canada

K1A OA3

SECRET

!?YJ 2 3 2010
MEMORANDUM FOR LOUIS U~VESQUE, STEPHEN RICHARDSON,
MORRIS ROSENBERG, TIM SARGENT

INTERNATIONAL AGREEMENTS AND


FEDERALIPROVINCIAL/TERRITORITAL CONSI[J)ERATIONS
Information Only

Canada

001137

Page 1138
is withheld pursuant to sections
est retenue en vertu des articles

14, 21 (1 )(b)

of the Access to Information Act


de la Acces

a l'information

5.14
5.19(1)
5.21 (1 )(b)

-3-

SECRET

~erge

uupom

Campbell/ss

001139

Page 1 of 1

Vanstone, Melanie
From:

Graham, Diana

Sent:

August 24, 2010 11:24 AM

To:

Vanstone, Melanie

Subject:

Finals ABitibi

Attachments: Questions and Answers August 23.doc; Timeline of AbitibiBowater.doc; Facts and Figures
August 23.doc; Lines-August 24.doc; Statement-revised august 23 -1430.doc

For your records.

2010-10-28

001140

Questions and Answers

1. Why is Canada settling this claim?


5.21 (1 )(b)

This move reinforces business and investor confidence in Canada.


There are many advantages to doing business in Canada; we will
ensure that Canada remains a leading global investment market.
It is also important to bring this matter to an early conclusion to avoid
long and expensive legal proceedings.

This shows our bilateral partners and investors around the world that
Canada is serious about the agreements it signs under this
Government's ambitious fr~e trade and investment agenda.

2. Newfoundland caused this dispute. Are they paying?


The federal government is constitutionally responsible for Canada's
international relations.
5.21 (1 )(b)

This Government actively engages its provincial and territorial


counterparts in international trade matters. In fact, just two months
ago, International Trade l\1inister Peter Van Loan chaired a meeting
with provincial and territorial ministers with discussions covering the
breadth of Canada's trade agenda.
Another sign of our Government's commitment is that provincial and
territorial officials are, for the first time ever in free trade negotiations, .

001141

part of team negotiating an agreement between Canada and the


European Union.

3. Doesn't this send the wrong message? What will you do to


prevent other provinces from doing something the feds will have to
pay for?
This is a topic of interest in our dialogue with provincial and territorial
governments on trade issues. Our Government actively engages its
provincial and territorial counterparts in international trade matters.
In fact, just two months ago~ Minister Van Loan chaired a meeting with
provincial and territorial ministers with discussions covering the
breadth of Canada's trade agenda.
Another sign of our Government's commitment is that provincial and
territorial officials are, for the first time ever in free trade negotiations,
part of team negotiating an agreement between Canada and the
European Union.
Earlier this month, the Council of the Federation discussed trade topics
at its meeting in Winnipeg. The premiers also noted their interest in
discussing the growing role of provinces and territories in international
trade negotiations and agreements. This is part of the dialogue our
Government is already having, and looks forward to continuing, with
its partners.

4. Isn't this a bailout? Doesn't this violate the Softwood Lumber


Agreement?

No.
5.21 (1 )(b)

001142

The compensation being paid is based on the fair market value of


assets which were expropriated.
This settlement is based on fair market values and is fully consistent
with the Softwood Lumber Agreement.

5. Abitibi has been in a lot of trouble, with its bankruptcy

proceedings and all. How many jobs are you saving with this
announcement?
5.21 (1 )(b)

This settlement is based on the fair market value of assets which were
expropriated and is dully consistent with the Softwood Lumber
Agreement.
With respect to what AbitibiBowater' s operations are projected to be in
the future, please contact the company.

001143

Timeline of AbitihiBowater's Trade Challenge

December 2008

AbitbiBowater announces that it will close its mill in


Grand Falls-Windsor, Newfoundland and Labrador, by
March 2009.

December 2008

The House of Assembly ofNewfoundland and Labrador


passed legislation, with support from all parties, to
expropriate the majority of AbitibiBowater's assets in
that province.

April 2009

AbitibiBowater filed for creditor protection in Canadian


and United States courts.

April 2009

AbitibiBowater files with the Government of Canada a


notice of intent to proceed to an arbitration respecting
Canada's international trade obligations and
Newfoundland and Labrador's legislation.

Fall 2009

The Government of Canada opens formal negotiations


with AbitibiBowater to reach a settlement of the
company's trade challenge.

February 2010

After early negotiations did not reach a conclusion,


AbitibiBowater filed a notice of arbitration and claimed
$500-million in compensation for the expropriated assets.

!.Winter and
August 2010

Settlement discussions and negotiations continue .

..

A settlement agreement is signed between the


Government and Canada and AbitibiBowater.

5.21 (1 )(b)

001144

Facts and Figures

The Numbers
$500-million

The amount of compensation AbitibiBowater claimed in


compensation for
its
expropriated
assets
m
Newfoundland and Labrador.

$130-million

Payment to AbitibiBowater.

The Details

AbitibiBowater has agreed to irrevocably end the arbitration process and


permanently withdraw its international trade challenge.
The compensation will be paid to the Canadian entity to be created as a
result of AbitibiBowater' s restructuring plans.
The compensation is consistent with the fair market value of
AbitibiBowater' s expropriated assets. As a result, the settlement
agreement fully complies with Canada's commitments under the 2006
Softwood Lumber Agreement.
The settlement agreement must be approved by courts in connection with
AbitibiBowater' s creditor arrangement proceedings in Canada,
bankruptcy proceedings in the United States, and subsequent
restructuring plans of the company in both countries.

001145

Lines-August 23
o The Government of Canada and AbitibiBowater have reached an
agreement with regards to the expropriation of assets in
Newfoundland and Labrador.
o The Government of Canada has agreed to make a payment of$130
million to AbitibBowater. AbitibiBowater has agreed to irrevocably
and permanently withdraw its claim against Canada.
o The Government of Canada has resolved this dispute for the benefit of
Canada's long-term economic interests.
o In reaching this agreement, we are avoiding potentially long and
costly legal proceedings.
o This approach reaffirms the Government of Canada's commitment to
maintaining a rules based business environment that facilitates free
trade and encourages investment.
o Under the leadership ofStephen Harper, our government will continue
to stand up for Canadian businesses at home and abroad by securing
greater access to the North American market place.

001146

Page 1147
is withheld pursuant to section
est retenue en vertu de l'article

21 (1 )(b)

of the Access to Information Act


de la Acces

a l'information

Page 1148
is withheld pursuant to sections
est retenue en vertu des articles

14, 19(1), 20(1)(b), 20(1)(c), 20(1)(d)

of the Access to Information Act


de la Acces

a l'information

abitibi

A-.

bowaterla'U
PRESS RELEASE
ABWTQ (OTC)

AbitibiBowater Announces Intention to Withdraw


NAFTA Notice of Arbitration
Settlement Agreement Reached with the Government of Canada
for C$130 Million
MONTREAL, CANADA, August 24, 2010 - AbitibiBowater today announced a formal
settlement agreement with the Government of Canada with regards to its assets and
rights in Newfoundland and Labrador, Canada, expropriated by the provincial
government under Bill 75 in December 2008. The Government of Canada will pay
AbitibiBowater C$130 million, representing not more than the fair market value of those
rights and assets, following the Company's emergence from creditor protection.
As part of the settlement agreement AbitibiBowater will waive its legal actions and
claims against the Government of Canada under the North American Free Trade
Agreement (NAFTA).
"We believe this is an acceptable settlement for our Company, stakeholders and
creditors, given the set of circumstances faced by the Company at this particular time
as well as the inherent uncertainty of any judicial process," stated David J. Paterson,
President and Chief Executive Officer. "We are now able to move forward and focus on
finalizing our restructuring process and plans to emerge from creditor protection in the
fall 2010."
"AbitibiBowater would like to thank the Government of Canada for its efforts to reach
this settlement and avoid a protracted and expensive NAFTA case. We look forward to
continuing our strong working relationships with Canada and contributing to the
country's economic, social and sustainable development," concluded Paterson.
The settlement agreement is conditional upon AbitibiBowater obtaining the approval of
its terms by the Superior Court of Quebec in the CCAA proceedings and by the U.S.
court in the chapter 11 bankruptcy proceedings as well as court approvals in the U.S.
and Canada of AbitibiBowater's restructuring plans. Following emergence, the
settlement payment will be paid to the new Canadian entity.
AbitibiBowater produces a wide range of newsprint, commercial printing and packaging
papers, market pulp and wood products. It is the eighth largest publicly traded pulp and
paper manufacturer in the world. AbitibiBowater owns or operates 19 pulp and paper
facilities and 24 wood products facilities located in the United States, Canada and South
Korea. Marketing its products in more than 70 countries, the Company is also among
Page 1 of 2

001149

the world's largest recyclers of old newspapers and magazines, and has third-party
certified 100% of its managed woodlands to sustainable forest management standards.
AbitibiBowater's shares trade over-the-counter on the Pink Sheets and on the OTC
Bulletin Board under the stock symbol ABWfQ.

-30Contacts
Investors
Duane Owens
Vice President, Finance
864 282-9488

Media and Others


Jean-Philippe Cote
Director, Public Affairs - Canada
514 394-2386
jean-philippe.cote@abitibibowater.com

Page 2 of 2

001150

Page l of3

Wigle, Andrew
From:

Pierre.Desmarais@international.gc.ca

Sent:

August 24, 2010 5:51 PM

5.19(1)

To:

Cc:

Philip.Halliday@international.gc.ca; Vargo.Edmunds@international.gc.ca;
Tanay.Patel@international.gc.ca; D-PRP@international.gc.ca; Roohi.Ahmed@international.gc.ca;
jean.boutet@ec.gc.ca;
L
Peters, Catherine;
david.mercier@hrsdc-rhdsc.gc.ca;
Pierre.Desmarais@international.gc.ca; Don.McDougall@international.gc.ca;
Frederic.Seppev@agr.gc.ca; Gilles.Gauthier@agr.gc.ca; Meredith.Henley@international.gc.ca;
lennifer.Fellows@agr.gc.ca; Jennifer.higginson@agr.gc.ca;
Dolores. Kohlmanailinternational.ac.ca;
Laurent.Cardinal@international.gc.ca; rvne.monastesse@ec.Qc.ca;
Vanstone. Melanie:
Darquise.Monette@international.oc.ca
Narnalle.uurana@agr.gc.ca;
Pascal. Brunea u@pch. gc. ea
pierre.p.bouchard@hrsdcrhdsc.ac.ca:
'Rina.Young@ec.gc.ca; Rita.Cerutti@ec.gc.ca;
JarrenW.Smith@international.gc.ca;
uems.;:,revenS@Intemanonal.gc.ca; aanura.rarolr@international.gc.ca;
Nadia.Theodare@international.gc.ca;
Steve.Verheul@international.gc.ca;
WangYuan@AGR.GC.CA; Sandra.Zimmerling@international.gc.ca;
John.O'Neill@international.gc.ca; Audrey.JolinLessard@international.gc.ca

Subject: -PRP 136 : DFAIT Statement on the AbitibiBowater settlement agreement I Declaration du MAECI
sur le reglement avec AbitibiBowater
For Information I A titre d'information
From I De : Intergovernmental Relations I Relations intergouvernementales
Number I Numero: PRP 136
Attachment(s) I Piece(s) jointe(s) : 0
La partie franqaise suit en seconde partie du message

Dear colleagues,
Please find below, for your information, the DFAIT Statement on the AbitibiBowater settlement agreement. To
view this document on the department website, please click on the following link:
http://www.international.gc.c~mf!il~ommerce/commlnews-communiques/20101268.aspx

Chers/cheres collegues,
Veuillez trouver ci-bas, pour votre information, la declaration du MAECI sur le reglement avec AbitibiBowater. Ce
document peut etre consulte au lien suivant sur le site interne! du ministere:
http://www. inteJHIio.[lal. gc.calmedia commerce/comm/news-communiq ues/201 0/268. aspx?lang=fra

2010-11-26
001151

Page 2 of3

Foreign Affairs and International Trade Canada Issues Statement on AbitibiBowater Settlement
(No. 268 -August 24, 2010 -4:45pm. ET) Foreign Affairs and International Trade Canada today issued the
following statement:
"The Government of Canada and AbitibiBowater have reached an agreement regarding the expropriation of
assets in Newfoundland and Labrador.
"The Government of Canada has agreed to make a payment of $130 million to AbitibiBowater upon the
company's restructuring. This payment represents the fair market value of the company's expropriated assets.
"AbitibiBowater has agreed to irrevocably and permanently withdraw its claim against Canada.
"The Government of Canada has resolved this dispute for the benefit of Canada's long-term economic interests.
In reaching this agreement, the Government of Canada is avoiding potentially long and costly legal proceedings.
"This approach reaffirms the Government of Canada's commitment to maintaining a rules-based business
environment that facilitates free trade and encourages investment.
"The Government of Canada is moving forward on an ambitious free trade and investment agenda-a
cornerstone of Canada's strong economic position and future growth. The government will continue to stand up
for Canadian businesses at home and abroad by securing greater access to the North American marketplace."
- 30For further information, media representatives may contact:
Trade Media Relations Office
Foreign Affairs and International Trade Canada
613-996-2000

--------------Declaration d'Affaires etrangeres et Commerce international Canada au sujet du reglement avec

AbitibiBowater
(N 268- Le 24 aoiit 2010 -16 h 45 HE) Affaires etrangeres et Commerce international Canada a fait aujourd'hui
la declaration suivante :

Le gouvernement du Canada et AbitibiBowater son! parvenus


actifs de l'entreprise a Terre-Neuve-et-Labrador.

a une entente concernant !'expropriation des

"Le gouvernement du Canada a accepte de verser une somme de 130 millions de dollars a AbitibiBowater une
fois la restructuration de l'entreprise terminee, so mme qui correspond la juste valeur de march! des actifs de
l'entreprise qui ant ete expropries.

AbitibiBowater a accepte de retirer de maniere irrevocable et permanente sa reclamation contre le Canada.

Le gouvernement du Canada a regie ce differend afin de servir les inten~ts economiques long terme du
Canada. En concluant cette entente, le gouvernement du Canada evite des procedures judiciaires
potentiellement tongues et coQteuses.
De par cette approche, le gouvernement du Canada reitere son engagement a maintenir un contexte
commercial fonde sur des regles qui facilite le libre-echange et encourage l'investissement.

2010-11-26

001152

Page 3 of3
Le gouvernement met de l'avant un ambitieux programme de libre-echange et d'investissement- pierre
angulaire de la solide position economique du Canada et de sa croissance economique dans l'avenir. Le
gouvernement continuera a defendre les interets des entreprises canadiennes au pays et a I' stranger en leur
garantissant un acces elargi au marche nord-americain.

- 30Pour de plus amples renseignements, les representants des medias sont pries de communiquer avec :
Le Service des relations avec les medias (commerce)
Affaires etrangeres et Commerce international Canada
613-996-2000

2010-11-26

001153

Page 1 of2

Wigle, Andrew
From:

Audrey.Jolinlessard@international.gc.ca

Sent:

Auaust 24 ?01 n 11?>1 AM

5.19(1)

To:

Cc:

John.O"Neill@international.gc.ca; Aladin.Legaultd'Auteuil@international.gc.ca;
Arun.Aiexander@international.gc.ca; Megan.Ciifford@international.gc.ca; DPRP@international.gc.ca; Roohi.Ahmed@international.gc.ca;
jean.boutet@ec.gc.ca
lavid.mercier@hrsdcrhdsc.gc.ca;
t"'lerre.uesmaraiS@Intematlonal.gc.ca; uon.IVIcUougall@lnternational.gc.ca;
Frederic.Seppey@agr.gc.ca; Gilles.Gauthier@agr.gc.ca; Meredith.Henley@international.gc.ca;
Jennifer.Fellows@agr.gc.ca; Jennifer.higginson@agr.gc.ca;
Dolores.Kohlman@international.gc.ca;
__
Laurent.Cardinal@international.gc.ca; lyne.monastesse@ec.gc.ca;
Vanstone, Melania;
; Nathalie.Durand@agr.gc.ca;
uarqwse.IVIanette@lnternanonal.gc.ca
; pierre.p.bouchard@hrsdcPascai.Bruneau@pch.gc.ca;
rhdsc.gc.ca;
Rina.Young@ec.gc.ca; Rita.Cerutti@ec.gc.ca;
DarrenW.Smith@international.gc.ca;
Denis.Stevens@international.gc.ca; danuta.tardif@international.gc.ca;
Steve. Verheu l@international.ge. ea;
Nadia. Theodore@i nternational. gc. ea;
WangYuan@AGR.GC.CA; Sandra.Zimmerling@international.gc.ca

Subject: PRP 134: Announcement AbitibiBowater I An nonce AbitibiBowater


For Information I A titre d'information
From I De : Intergovernmental Relations I Relations intergouvernementales
Number I Numero: PRP 134
Attachment(s) I Piece(s) jointe(s): 0

5.21 (1 )(b)
La partie fram;aise suit en seconde partie du message

Megan Clifford
Deputy Director I Directrice adjointe
Investment Trade Policy Division (TBI)/Direction de la politique commerciale sur l'investissement (TBI)

2010-11-26

001154

Page2 of2
Department of Foreign Affairs and International Trade/ Ministere des Affaires E!trangeres et du Commerce International
Tel: 613-9957141
Fax: 613-944-0679

E-mail: megan.clifford@international.gc.ca

5.21 (1 )(b)

Megan Clifford
Deputy Director I Directrice adjolnte
Investment Trade Policy Division {TBI)/Direction de la politique commerciale sur l'investissement (TBI)
Departrrient of Foreign Affairs and International Trade/ MinistE!re des Affalres E!trangEres et du Commerce International
Tel: 613995-7141
Fax: 613-944-0679

E-mail: meqan.clifford@.international.gc.ca

2010-11-26

001155

AbitibiBowater case heads to Supreme Court


Ross Marowits
Montreal- The Canadian Press
Published Wednesday, Aug. 18,2010 1:16PM EDT
Last updated Tuesday, Aug. 24,2010 5:02PM EDT

The Newfoundland and Labrador government is appealing to the Supreme Court of


Canada a Quebec court ruling on the environmental mess left by insolvent paper
company AbitibiBowater Inc.
The province said the country's top court needs to determine key issues of public
importance related to the Companies' Creditors Arrangement Act.
It wants to know whether a debtor's statutory duty to remove environmental
contamination is "extinguished" under the CCAA, like commercial debt, it said in a
notice of application.

The move to seek leave to appeal a Quebec Superior Court ruling comes about three
months after the Quebec Court of Appeal refused to hear the case.
Newfoundland said the case raises three specific issues:- ensuring consistency across the
country by resolving a conflict between provincial environmental law and federal
bankruptcy and insolvency law; -who should bear the cleanup costs when a company is
attempting to restructure; - does the CCAA give a court power to remove all hurdles
under provincial law that impair a company's ability to restructure.
Newfoundland Premier Danny Williams promised in May to take the case to the high
court after he conceded the province would likely have to clean up the multimilliondollar mess left by the Montreal-based newsprint giant.
The province wants to force Abitibi to clean up five sites it ran between 1905 and 2008.
They include a defunct Grand Falls-Windsor paper mill in central Newfoundland that the
government expropriated in December, 2008.
The province rushed through legislation to seize Abitibi timber and water rights, along
with a hydroelectric power station, after the failing company announced it was closing
the paper mill.
Mr. Williams has blamed a bureaucratic foul-up for the accidental seizure of the mill and
its cleanup costs.
He accused the Quebec courts of "bias" for being fixated on having Abitibi restructure.

001156

In its notice seeking to appeal the Quebec court ruling, Newfoundland called industrial
pollution one of the scourges of the modem age.
At the heart of all legislation designed to redress the effects of pollution is the "polluterpay" principle requiring those responsible for cleaning it up.
"The point of this principle is to ensure that governments are not left footing the bill," it
said, noting that the principle has been endorsed by the Supreme Court.
AbitibiBowater declined to comment on the province's latest legal move.
The company's creditors are set to vote on a restructuring plan on Sept. 14 that would
allow the company to exit court protection in mid-October.
AbitibiBowater reined in its losses in the second quarter, reducing its red ink to $297million (U.S.) in the three-month period ended June 30, compared with $510-million in
the same year-ago quarter.
Revenue grew 14 per cent to $1.18-billion from $1.04-billion on higher prices for paper,
pulp and wood products, though the results were negatively affected by lower prices for
specialty papers.
The company has been under protection from creditors since April, 2009.
It has cut 6,000 employees and dramatically reduced its paper and wood capacity as it
prepares to exit creditor protection as a lower-cost producer better able to absorb market
and currency fluctuations.

001157

s.14

AbitibiBowater

s.21 (1 )(b)

Key Messages

Background
0

In December 2008, the Government of NL passed legislation expropriating


AbitibiBowater assets in the province including land, water and timber
rights and the paper mill in Grand Falls-Windsor. As signatory to the
North American Free Trade Agreement (NAFTA), the Government of
Canada is legally bound to fulfill any international arbitration ruling,
regardless of whether the measures in question are federal or provincial.

001158

s.14

Issue : Newfoundland and Labrador's Appeal Dismissed

s.21 (1 )(b)

In November 2009 NL served a Motion under its Environmental Protection


Act in the Quebec Superior Court in which it argued that the ministerial
orders against AbitibiBowater for remediation of five sites in NL were not
"creditor claims" under the CCAA, as they do not require the company to
make payments to the province but rather to comply with its obligations for
the protection of the environment.

The ruling by the Quebec Superior Court on March 31, 2010, dismissed
NL's motion and ruled that the EPA Orders are, in substance, financial or
monetary in nature, and are thus prohibited under the First Stay Extension
Order. The province's appeal was heard and a decision was rendered on
May 18, 2010 in which the province's leave to appeal was denied.

001159

Pages 1160 to I

a 1162

are withheld pursuant to section


sont retenues en vertu de l'article

68(a)

of the Access to Information Act


de la Acces

a l'information

5.14
5.21 (1 )(a)
5.21 (1)(b)
SECRET

MEMORANDUM FOR SERGE DUPONT


OPTIONS FOR PROVINCIAUTERRITORIAL
LIABILITY IN INTERNATIONAL TRADE AGREEMENTS
(Information Only)

001163

Pages 1164 to I

a 1169

are withheld pursuant to sections


sont retenues en vertu des articles

14, 21 (1 )(a), 21 (1 )(b)

of the Access to Information Act


de la Acces

a l'information

AbitibiBowater set for rebirth as profitable company - CTV News

Page I of I

The Canadian Press


Date: Tuesday Nov. 23, 2010 11:03 AM ET
MONTREAL- Insolvent newsprint giant AbitibiBowater expects to be reborn as a profitable and less indebted company in ear
U.S. Bankruptcy Court endorsed its restructuring plan.
The Delaware-based judge overruled creditor objections to sanction the company's restructuring plan that sheds about $5.5 bill
The ruling paves the way for AbitibiBowater to exit bankruptcy protection sometime between Dec. 7 and 15 with about $1.5 billi
He said it was a relief to have finally won court approval that will end $500,000 a day in fees for lawyers and other advisers.
The total price tag for the legal process is expected to reach about $250 million.
The world's largest newsprint producer by capacity hopes its efforts to reduce costs and improving market conditions will help it
Paterson said the Montreal-based company plans to address declining paper demand by converting some production to undisc
The move should prevent the need for further painful plant closures and layoffs.
Paterson said he still believes in the paper industry but said other players need to cut capacity to adjust to a shift to electronic n
AbitibiBowater, formed from the 2007 merger of Canadian and U.S. newsprint companies, produces newsprint, commercial prir
The company operates 19 pulp and paper mills and 24 wood products operations in the United States, Canada, the United Kin!
Its shares will resume trading on the Toronto and New York stock exchanges under the ABH symbol once it exits court protecfi,

http://Www.ctv.ca/CTVNews/Business/20I01123/abitibibowater-rebirth-101123/

2010-11-25

001170

Cour supreme du Canada

No. 33797

November 25, 2010

Le 25 novembre 201 0

Coram: Binnie, Fish and Rothstein JJ.

Coram : Les juges Binnie, Fish et Rothstein

BETWEEN:

ENTRE:

Her Majesty the Queen in Right of the


Province ofNewfoundland and Labrador

Sa Majeste la Reine du chef de la province de


Terre-Neuve et Labrador

Applicant

Demanderesse

-and-

-et-

Abitibibowater Inc., Abitibi-Consolidated


Inc., Bowater Canadian Holdings Inc., Ad
Hoc Committee of Bondholders, Ad Hoc
Committee of Senior Secured Noteholders
and U.S. Bank National Association
(Indenture Trustee for the Senior Secured
Noteholders)

Abitibibowater Inc., Abitibi-Consolidated


Inc., Bowater Canadian Holdings Inc., comite
ad hoc des creanciers obligataires, comite ad
hoc des porteurs de billets garantis de premier
rang et U.S. Bank National Association
(fiduciaire designe par l'acte constitutifpour
les porteurs de billets garantis de premier
rang)

Respondents

In times

001171

No. 33797

JUDGMENT

JUGEMENT

The application for leave to appeal from the


judgment of the Court of Appeal of Quebec
(Montreal), Number 500-09-020594-107,
2010 QCCA 965, dated May 18,2010, is
granted with costs in the cause.

La demande d'autorisation d'appel de l'arret


de la Cour d'appel du Quebec (Montreal),
numero 500-09-020594-107, 2010 QCCA
965, date du 18 mai 2010, est accordee avec
depens suivant l'issue de la cause.

J.S.C.C.
J.C.S.C.

001172

Supreme Court of Canada - SCC Case Information - Summary

Page 1 of 1

SCC Case Information


Summary
33797
Her Majesty the Queen in Right of the Province of Newfoundland and
Labrador v. Abitibibowater Inc., et al.
(Quebec) (Civil) (By Leave)

Keywords
Commercial Law.

Summary
Case summaries are prepared by the Office of the Registrar of the Supreme Court of Canada
(Law Branch) for information purposes only.

Bankruptcy and Insolvency - Environmental Law - Companies' Creditors Arrangement Act, R.S.C.
1985, c. C-36 - Compromises and Arrangements - Claims- Nature of ministerial orders pursuant to s.
99 of Environmental Protection Act, S.N.L. 2002, c. E-14.2 -Whether a statutory duty to remove
environmental contamination may be extinguished under the Companies' Creditors Arrangement Act
like a commercial debt.
The Minister of Environment and Conservation of Newfoundland and Labrador issued five ministerial
orders (''EPA orders") pursuant to s. 99 of the Environmental Protection Act, S.N.L. 2002, c. E-14.2,
against Abitibi, requiring it to, among other things, complete environmental remediation of sites where
it conducted large-scale industrial activities. At the time the orders were issued, the respondent Abitibi
had filed for protection under the Companies' Creditors Arrangement Act, R.S.C. 1985, c. C-36
("CCAA"). A claims procedure order was subsequently made, directing Abitibi's creditors to file their
proofs of claim by the claims bar date. The Province of Newfoundland and Labrador moved for an
order declaring that the EPA orders were not barred or extinguished and their enforceability was not
affected by that claims procedure order. The Province argued, among other things, that the statutory
duty to remediate contaminated lands could not be considered a "claim" under the claims procedure
order or the CCAA. In its view, the EPA orders were in relation to the environment and did not fall
within the definition of "claim" contained in the CCAA. The Superior Court dismissed the motion. The
Court of Appeal denied leave to appeal.

http://www.scc-csc.gc.ca/case-dossier/cms-sgd/sum-som-eng.aspx?cas=33797

2010-11-25

001173

Page 1 of2

Supreme Court of Canada - SCC Case Information - Docket

SCC Case Information


Docket
33797
Her Majesty the Queen in Right of the Province of Newfoundland and
Labrador v. Abitibibowater Inc., et al.
(Quebec) (Civil) (By Leave)

Proceedings

0-10-12

Filed By

Proceeding

Date
!

\11 ..................... ,

'

All materials on application for leave

1suurr11tted to the Judges, Bi F Ro


Applicant's reply to respondent's argument,
Service missing - Rec'd on September 29,
2010, Completed on: 2010-10-04

2010-09-27

2010-09-16

~of authorities

2010-09-16
!

o,., ... ..,,..ndent's response on the applh..duun 1ur


leave to appeal, Completed on: 2010-09-16

2010-09-07

Order on motion to substitutional service

2010-09-07

Decision on motion for substitutional service,


of copies of documents filed in this Court on
all interested parties other than the
respondents and the Monitor in accordance
with the practice of the Quebec Superior Court
(Commercial Division), Reg
Granted, .

2010-09-07

~~~~

~~~
n

2010-08-19

2010-08-18
2010-08-16

,f

Her Majesty the Queen


in Right of the Province
of Newfoundland and
Labrador
i

ADIJ:Iulbowater Inc.

'AUILJuJbowater Inc.
Her Majesty the Queen
in Right of the Province
of Newfoundland and
Labrador

1110tion for substitutional

Motion for substitutional service, namely that


the applicant may serve copies of documents
on all interested parties other than the
respondents and the Monitor in accordance
with the practice of the Quebec Superior Court
(Commercial Division) (bokform), Completed
on: 2010-08-19

Her Majesty the Queen


in Right of the Province
of Newfoundland and
Labrador

I;~~~~; acknowledging

receipt of a complete
cation for leave to appeal

Application for leave to appeal, (2 volumes),


Completed on: 2010-08-18

Her Majesty the Queen


in Right of the Province
of Newfoundland and
Labrador

http://www.scc-csc.gc.calcase-dossier/cms-sgd/dock-regi-eng.aspx?cas=33797

2010-11-25

001174

Supreme Court of Canada - SCC Case Information - Docket

Page 2 of2

http://www.scc-csc.gc.ca!case-dossier/cms-sgd/dock-regi-eng.aspx?cas=33797

2010-11-25

001175

CBC News- Money- AbitibiBowater appeal heads to Supreme Court

Page 1 of2

AbitibiBowater appeal heads to Supreme


Court
Last Updated: Thursday, November 25, 2010112:20 PM ETComments13Recommend9
The Canadian Press

government expropriated the Grand Falls- Windsor


paper mill in central Newfoundland in December 2008. (CBC)

The Supreme Court of Canada has agreed to hear Newfoundland and Labrador's appeal of an
AbitibiBowater environmental cleanup ruling that favoured the insolvent newsprint giant.
The high court said Thursday that it granted leave to appeal a lower court ruling with costs. The Quebec
Court of Appeal had previously refused to hear the case.
The province had said the country's top court needed to determine key issues of public importance
related to the creditor protection process under which the initial ruling was made.
In particular it said the court needs to decide if a debtor's statutory duty to remove environmental
contamination is "extinguished" under the Companies' Creditors Arrangement Act, as it is in a
commercial debt.
The world's largest newsprint company by capacity expects to exit 20 months of creditor protection in
Canada and the United States in early December.

Province wants sites cleaned up


The province wants to force Abitibi to clean up five sites it ran between 1905 and 2008. They include a
defunct Grand Falls-Windsor paper mill in central Newfoundland that the government expropriated in
December 2008.
The province rushed through legislation to seize Abitibi timber and water rights, along with a
hydroelectric power station, after the failing company announced it was closing the paper mill.
The federal government subsequently agreed to pay AbitibiBowater $130 million to settle a claim under
the North American Free Trade Agreement.
Premier Danny Williams, who announced his resignation from politics effective Dec. 3, had accused the
Quebec courts of "bias" for being fixated on having Abitibi restructure.
In its notice seeking to appeal the Quebec court ruling, Newfoundland and Labrador called industrial

http://www .cbc.ca/money/story /20 10/11 /25/abitibi-bowater-appeal.html

2010-11-25

001176

CBC News - Money - AbitibiBowater appeal heads to Supreme Court

Page 2 of2

pollution one of the scourges of the modem age.


At the heart of all legislation designed to redress the effects of pollution is the "polluter-pay" principle
requiring those responsible for cleaning it up.

http://www.cbc.ca/money/story/2010/11/25/abitibi-bowater-appeal.html

2010-11-25

001177

5.14
Category 3- Background/Information items
SUPREME COURT OF CANADA GRANTS NEWFOUNDLAND AND
LABRADOR LEAVE TO APPEAL IN LITIGATION WITH ABITIBIBOWATER
OVER ENVIRONMENTAL REMEDIATION ORDERS
0

On December 16, 2008, the Government of Newfoundland and Labrador


(NL) passed legislation expropriating AbitibiBowater (AB) assets in the
province including land, water and timber rights. On April23, 2009, AB
filed a Notice of Intent to pursue arbitration under the North American Free
Trade Agreement (NAFTA) with respect to the expropriation.

On November 25, 2010, the Supreme Court of Canada (SCC) granted a


request by NL for leave to appeal an earlier Quebec Court of Appeal
(QCA) ruling that had upheld a judgement of the Quebec Superior Court
(QSC) dismissing NL's litigation against AB regarding remediation costs.

In November 2009, NL had served a Motion under its Environmental


Protection Act (EPA) in the QSC in which it argued that the ministerial
orders against AB for remediation of five sites in NL were not "creditor
claims" under the Companies' Creditors Arrangement Act (CCAA) as they
do not require the company to make payments to the province but rather
to comply with its obligations for the protection of the environment.

The subsequent ruling by the QSC on March 31, 2010, dismissed NL's
motion and ruled that the EPA Orders are, in substance, financial or
monetary in nature, and are thus prohibited pursuant to an earlier court
order under the CCAA.

The province's request for leave to appeal was denied by the QCA
on May 18, 2010, and NL subsequently appealed to the SCC.
0

Following a ruling earlier this


week by the U.S. Bankruptcy Court, the CEO of AB announced that the
company is expected to emerge from bankruptcy protection between
December 7 and 15, 2010.

001178

s.14

Category 3 - Background/Information items


SUPREME COURT OF CANADA GRANTS NEWFOUNDLAND AND
LABRADOR LEAVE TO APPEAL IN LITIGATION WITH ABITIBIBOWATER
OVER ENVIRONMENTAL REMEDIATION ORDERS
0

On December 16, 2008, the Government of Newfoundland and Labrador


(NL) passed legislation expropriating AbitibiBowater (AB) assets in the
province including land, water and timber rights, but excluding its pulp and
paper mill in Grand Falls Windsor. On April 23, 2009, AB filed a Notice of
Intent to pursue arbitration under the North American Free Trade
Agreement (NAFTA) with respect to the expropriation.

On November 25, 2010, the Supreme Court of Canada (SCC) granted a


request by NL for leave to appeal an earlier Quebec Court of Appeal
(QCA) ruling that had upheld a judgement of the Quebec Superior Court
(QSC) dismissing NL's litigation against AB regarding remediation costs.

In November 2009 NL had served a Motion under its Environmental


Protection Act (EPA) in the QSC in which it argued that the ministerial
orders against AB for remediation of five sites in NL were not "creditor
claims" under the Companies' Creditors Arrangement Act (CCAA) as they
do not require the company to make payments to the province but rather
to comply with its obligations for the protection of the environment.

The subsequent ruling by the QSC on March 31, 2010, dismissed NL's
motion and ruled that the EPA Orders are, in substance, financial or
monetary in nature, and are thus prohibited pursuant to an earlier court
order under the CCAA.

The province's request for leave to appeal was denied by the QCA
on May 18, 2010, and NL subsequently appealed to the SCC.
0

001179

5.14
Category 3 - Background/Information items
SUPREME COURT OF CANADA GRANTS NEWFOUNDLAND AND
LABRADOR LEAVE TO APPEAL IN LITIGATION WITH ABITIBIBOWATER
OVER ENVIRONMENTAL REMEDIATION ORDERS
0

On November 25, 2010, the Supreme Court of Canada (SCC) granted a


request by Newfoundland and Labrador (NL) for leave to appeal an earlier
Quebec Court of Appeal (QCA) ruling that had upheld a judgement of the
Quebec Superior Court (QSC) dismissing NL's litigation against
AbitibiBowater (AB) in a case involving environmental remediation costs.

In November 2009 NL served a Motion under its Environmental Protection


Act (EPA) in the QSC in which it argued that the ministerial orders against
AB for remediation of five sites in NL were not "creditor claims" under the
Companies' Creditors Arrangement Act (CCAA) as they do not require the
company to make payments to the province but rather to comply with its
obligations for the protection of the environment.

The subsequent ruling by the QSC on March 31, 2010, dismissed NL's
motion and ruled that the EPA Orders are, in substance, financial or
monetary in nature, and are thus prohibited pursuant to an earlier court
order under the CCAA. .

The province's request for leave to appeal was denied by the QCA
on May 18, 2010, and NL subsequently appealed to the SCC.
0

001180

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est retenue en vertu de l'article

14

of the Access to Information Act


de la Acces

a l'information

,,

1
liT

Government of Canada Gouvernement du Canada


Privy Council Office
Bureau du Conseil prive

lnfoXpress:

To:

408995

CIMS: 2009-IGA-00060
Folder: 681607

Natasha Rascanin

Date:

MEMORANDUM FOR JOHN KNUBLEY I NOTE

A L'INTENTION DE JOHN KNUBLEY

Subject:

5.19(1)

(UPDATE ON THE EXPROPRIATION OF


ABITIBIBOWATER INVESTMENTS IN NEWFOUNDLAND AND LABRADOR)
VERSIONS:

Fr~

3raham Swan

Vie:

D Your signature

X Information

Votre signature

For decision
Pour decision

For comments
Pour commentaires

D Material for the PM


Material pour le PM
CONSULTATION:

IGNAIG
oSNAS

~SPR/PSR
oCOMMS

COMMENTS:
OTHER PCO/
AUTRE BCP
o SD/DS
o ERDP/PDER
oP&P
o LSMP/SLPM
o PCO/BCP- COM
o MOG/AG.
o Leg. Couns./Ops Jur.
o Dem. Ref/Ref Dem
o F & DP/ P. E & D

OTHER/AUTRE

cc:

DISTRIBUTION :
R. Coleman

A. Macleod

5.19(1)

N. Rascanin
K. Campbell
P. Aterman

Central File
FPR Officer
CircCopy

Drafting Officer: Gilbert/et

::ODMA\PCDOCS\PCO_PROD\409718\1

001182

1+1

Government of Canada
Privy Council Office

Gouvernement du Canada
Bureau du Conseil prive

Ottawa Canada
K1A OA3

SECRET
MEMORANDUM FOR JOHN KNUBLEY

JAN 2 1 2009

UPDATE ON THE EXPROPRIATION OF ABITIBIBOWATER


INVESTMENTS IN NEWFOUNDLAND AND LABRADOR

(Information Only)
SUMMARY
0

This note is in preparation for your upcoming meeting with Deputy Ministers from PCO, Justice
and International Trade.

A meeting was held on Monday, January 12, 2009, between PCO Operations, IGA and PCO
Counsel and officials from Foreign Affairs and International Trade (DFAIT) regarding
Newfoundland and Labrador's expropriation of AbitibiBowater assets and implications for the
Government of Canada.

Not

Process ~d

I am happy_ to discuss further at your convenience.

Canada

s.14
s.21 (1 )(a)
s.21 (1 )(b)

001183

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-4-

SECRET
5.14

5.21 (1 )(a)
5.21 (1 )(b)

5.19(1)
Natasha Rascanin
Attachments
Gilbertlct/gl

001186

001187

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23
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001198

Abitibi Bowater Timelines

Activity to Date

Dec 4, 2008

AbitibiBowater (AB) announces closure of newsprint plant in


Grand Falls-Windsor to take place in March 2009

Dec 16, 2008

re:
Call to DFAIT from
NAFTA Implications
Legislation regarding Abitibi-:Sowater passed in Nfld/Lab House
of Assembly
I

Dec. 17,2008

AB reacts in media to say that they are reviewing legal options

Dec 18

Dec 19

Dec23

5.14
5.15(1)
5.21 (1 )(b)

001199

s.14
s.15(1)
s.21 (1 )(b)

- 2-

Dec23
January 15,
2009

Future Events/Possible NAFTA Timelihes

January
2009

28,

----

...

..

23,
February
2009
March
10-11'
2009
17-18,
March
2009
March/April
2009 (tbc)
Spring 2009

June 2009

001200

- 3-

September
2009

Appointment of Arbitrators
Both Parties have 90 days to appoint their arbitrator.

Spring/Summer Written Memorials


2010
Fall
Tribunal holds hearings
201 0/Winter
2011
Spring/Fall
Arbitral Award
2011

s.15(1)
s.21 (1 )(b)

001201

001202

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