GRAND FALLS-WINDSOR, N.L. – Premier Danny Williams promised Tuesday to provide severance and other benefits to 800 laid-off workers at the AbitibiBowater Inc. (TSX:ABH) paper mill in central Newfoundland.
Williams said the province is determined to ensure that workers affected by closure of the mill in Grand Falls-Windsor “are protected to the greatest extent possible.”
“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,” he said in a statement.
“Unfortunately, that has not been the case to date by the company.”
Severance and some early retirement benefits will be provided to unionized and non-unionized mill workers, as well as others involved in logging operations.
The Montreal-based company closed the mill recently and has not provided severance after filing for bankruptcyprotection from its creditors in Canada and the United States.
The Newfoundland and Labrador government passed legislation in December to expropriate the mill’s assets and water and timber rights, despite the company’s objections.
At the time, Williams accused the company of breaking a century-old “covenant” with the province when it decided to close the mill.
Williams said Tuesday it is now “only appropriate and fair that the workers are not left behind and disadvantaged by Abitibi’s decision to close this operation.”
The premier said his government will work with the Communications, Energy and Paperworkers union and the International Brotherhood of Electrical Workers to ensure that “funds are dispersed as quickly as possible.”
Williams was joined at a news conference in Grand Falls-Windsor by Natural Resources Minister Kathy Dunderdale, Innovation Trade and Rural Development Minister Shawn Skinner and others.
“AbitibiBowater’s financial position has left many Newfoundlanders and Labradorians feeling particularly vulnerable,” said Skinner, who is chair of a task force established to respond to the mill’s closure.
“It also created a unique situation and one that required a unique solution.”
AbitibiBowater is proceeding with a challenge under the North American Free Trade Agreement against the province’s expropriation of its resource rights and assets.
The paper company says the expropriation violates Canada’s obligations under NAFTA because it does not ensure payment for the fair market value of its expropriated assets and rights.
AbitibiBowater also claims that the expropriation is retaliatory and discriminatory. It is seeking more than $300 million in direct compensation plus additional costs.
AbitibiBowater said it was forced to close the mill because of the global economic slowdown and after unionized workers rejected contract concessions.