NAFTA vs the British North America Act

December 28, 2008 2:18 AM

NAFTA treaty may face constitutional challenge in Canada.Premier Danny Williams Of Newfoundland and Labrador, already famous for his immensely successful ABC (Anything but Conservative) campaign during the 2008 federal election, is terminating the forestry tenure of AbitibiBowater and expropriating its assets. This move came as a response to AbitibiBowater's decision to close a newspaper mill.

I have reposted the Globe and Mail Article to an empty blog because soon the link will require payment to access. Original link here

This is about two things. First, it's about government actually enforcing resource contracts. Lumber mills and Aluminum smelters have been closing all over Canada not because they're no longer profitable but because it became much more profitable to close the mills and sell power from the hydro plants they were only allowed to build on an implied or contractual agreement that required them to run a mill or smelter. Even written contracts haven't been enforced. Newfoundland is finally doing something to put a stop to this trend that has made resource companies buckets of money and put thousands of Canadians out of work.

Secondly this is about the abuse Federal Law when it comes to international agreements. Provinces are constitutionally guarunteed the right to manage their own resources. Constitutionally, this decision cannot be interfered with by the federal government. This has been tested in the courts. But the federal government has the sole right to make international agreements. The question is, can it bind provinces to these agreements without their consent? Hypothetically it can't. But this has never been tested in the courts before.

Danny Williams has unanimous popular support. If he wins this one he could probably run for Prime Minister and win by a landslide.

posted by Pseudology (21 comments total)

Wait... a right-of-center party standing up to business? I'm so confused...
posted by cthuljew at 2:39 AM on December 28, 2008

Huh. So does anyone know what will happen to Harper once the Parliament reconvenes?
posted by delmoi at 4:05 AM on December 28, 2008

So does anyone know what will happen to Harper once the Parliament reconvenes?

It's hard to say what will happen with Harper. No one predicted that he would use the budget speech as an opportunity to undercut his opponents, and Harper in turn seemed completely surprised that the opposition would form a coalition and rise up against him.

My guess, FWIW, is that Harper is going to find a way to work with Ignatieff (the new Liberal opposition leader) to put together a relief-heavy budget in the new year -- the sort of budget the Conservatives should have been assembling in the first place, rather than playing political games while insisting that nothing was going wrong in the Canadian economy.

If anything, Danny Williams is showing the kind of leadership that is needed right now: swift action and decisive measures to preserve jobs in the face of corporate self-interest. I hope the federal politicians are taking notes.
posted by spoobnooble at 5:36 AM on December 28, 2008

So does anyone know what will happen to Harper once the Parliament reconvenes?

What should happen: Forming of a new government, or dropping the writ.

I must note that "reconvene" is a bad term here. A new Parliament will convene, not the old one. Prorougment ends a sitting of Parliament -- it's the normal way to end one, once all the work stated in the Queen's Speech is done.

The fast Prorougment, however, should end the Harper government.

Why: Prorogument kills every bill not yet passed. At least one of those bills was a supply bill, many of them were bills to act upon the goals of the government, as stated in the Queen's Speech. By progroument, those bills failed. A failed supply or speech bill is a failed no confidence vote.

Therefore, the Harper government has failed not one, but many, votes of confidence.

Now, if only someone would go to the Governor General and point that out -- with, of course, the request that they be allowed to form a new government.

Harper is playing hardball. It would do his opponents well for them to do the same. It would do their supporters well to *vote them out* if they refuse to do so.
posted by eriko at 7:09 AM on December 28, 2008

I was trying to do some research to come up with some thoughtful commentary on current Canadian politics. Instead I found this.
posted by carmen at 7:21 AM on December 28, 2008

Of course, this all ignores the fact that forestry companies (and to a lesser extent, pulp and paper companies) are going through the most difficult time they've ever had. Mills are closing all over North America, and the largest companies (Weyerhauser, for example) are shrinking their production to a degree never before seen in an attempt to reduce the amount of product on the market and bring prices up. Some companies are selling lumber at less than cost in order to keep paying their workers (because once a trained millwright or other worker in the now-technical mill positions leave, it's hell to get them back).

They can go ahead and take control of these mills and wood lots, but they aren't going to solve the real problem....a lack of house building and other demand in the U.S. is killing lumber companies and the tough economic conditions in the U.S. are slowing pulp and paper purchases.
posted by Kickstart70 at 8:37 AM on December 28, 2008

They can go ahead and take control of these mills and wood lots, but they aren't going to solve the real problem....a lack of house building and other demand in the U.S. is killing lumber companies and the tough economic conditions in the U.S. are slowing pulp and paper purchases.

The softwood lumber agreement, an "agreement" that is fundamentally counter to the principles of NAFTA, is what is killing lumber companies in Canada.
posted by KokuRyu at 9:03 AM on December 28, 2008

Definitely a cool move by Williams. If a company doesn't live up to an agreement (keeping a mill running in this case), it shouldn't be able to keep a hold on the timber, land, mineral and water rights that agreement hinged on. It should not be a lifetime membership.

NAFTA haters and lovers are going to be watching this fight very carefully.
posted by stokast at 9:17 AM on December 28, 2008

They can go ahead and take control of these mills and wood lots, but they aren't going to solve the real problem....a lack of house building and other demand in the U.S. is killing lumber companies and the tough economic conditions in the U.S. are slowing pulp and paper purchases.

But there is no way for any government or timber company in Canada to solve the "problem" of lack of demand in the US. All that they can do is stop cutting so much timber, but obviously we wouldn't want that (OMG jobs!), so I'm sure our governments will find some underhanded way to subsidize timber harvesting even further, without upsetting the Americans too much.
posted by ssg at 9:49 AM on December 28, 2008

Danny Williams has unanimous popular support. If he wins this one he could probably run for Prime Minister and win by a landslide.

wait, what?

you don't run for PM directly; you become the PM by being the leader of the party (or coalition, come to think of it) that receives the most seats in Parliament.
posted by heeeraldo at 10:42 AM on December 28, 2008

I think the prime minister comment was a flippant one... Williams is a very unlikely candidate. It's conceivable, and interesting to consider, but he'd probably never be selected leader of the federal Conservatives.
posted by stokast at 11:16 AM on December 28, 2008

I was trying to do some research to come up with some thoughtful commentary on current Canadian politics. Instead I found this.

Thanks!
posted by mazola at 11:53 AM on December 28, 2008

Wait... a right-of-center party standing up to business? I'm so confused...

I'm not terribly familiar with Williams, but for a lot of people in Canada, there really is still a difference between economic neo-conservatism and the older political concept of conservatism. Sure, on some issues, for some people, they're aligned, but on some they're not.
posted by regicide is good for you at 12:01 PM on December 28, 2008 [2 favorites]

It's conceivable, and interesting to consider, but he'd probably never be selected leader of the federal Conservatives.
That's no joke. My money's on Brian Tobin anyway.
posted by monkeymike at 12:01 PM on December 28, 2008

I'm a little confused about this issue, and there doesn't seem to be any clear summaries around..

First, on timber rights.. AbitibiBowater had timber cutting rights on crown land. They decided not to use them (why would you decide not to exploit an asset?), so the province is in the process of moving the rights to somebody who will use them? Aren't all resource rights granted with the understanding that the company will actively exploit whatever they find? Isn't that the primary reason why landowners don't get resource extraction rights on land they own -- because they may choose not to exploit the resources? Maybe I'm thinking of Alberta law and not Canadian law, or something... How are resource companies normally dealt with when they refuse to exploit the rights they've been granted?

Second, on hydro issue.. What exactly is being expropriated? The actual plant, it seems.. no, it looks like they are expropriating the plant, and everything related to its ability to operate. What are the terms of this expropriation? This appears to be Abitibi's own letter of complaint, and it says there are plans for compensation:

In particular, although Article 10(2) of Bill 75 purports to authorize the payment of certain compensation, this compensation is limited on its face to certain hydro assets, with no compensation whatsoever for the confiscation or impairment of AbitibiBowater’s other rights and assets.

Finally, somebody in a Globe and Mail comment thread points out, the value of the entire company is only about $30 million, yet the value of the hydro plant(s?) is around $100-200million. How mired in debt is this company?

Canadian news never covers the details..
posted by Chuckles at 12:19 PM on December 28, 2008 [1 favorite]

It's interesting to compare the discussion of this to the discussion of Medellin here a few months ago. The underlying legal issues seem pretty similar.
posted by Mr. President Dr. Steve Elvis America at 12:19 PM on December 28, 2008

A new Parliament will convene, not the old one.

Technically, it's not a new Parliament. It's a new session of the same Parliament.

By progroument, those bills failed. A failed supply or speech bill is a failed no confidence vote.
…
Now, if only someone would go to the Governor General and point that out -- with, of course, the request that they be allowed to form a new government.

The budget disappearing from the agenda along with everything else because of prorogation is in no way equivalent to a vote of no confidence. Harper has not (yet?) lost the confidence of Parliament, so the Governor General cannot just ask someone else to be her Prime Minister without provoking a real constitutional crisis.
posted by oaf at 7:54 PM on December 28, 2008

Danny Williams has unanimous popular support. If he wins this one he could probably run for Prime Minister and win by a landslide.

wait, what?

you don't run for PM directly; you become the PM by being the leader of the party (or coalition, come to think of it) that receives the most seats in Parliament.
posted by heeeraldo at 10:42 AM on December 28 [+] [!]

Sorry, I oversimplified. That can happen in 2am posts. I was kind of hoping that he might eventually enter Federal Politics like Bob Rae did. He;d need to break into one of the parties, though. The Liberal party might have him. He probably has a few contacts after his ABC campaign. If he beats NAFTA he'd have ridiculous popular support.

Quite Frankly, I wish he was running my province right now. Especially since we just signed this (it's consequences explained here) with Alberta without any public consultation whatsoever. We didn't even get a warning. Nobody knew about it until it was on the table and being rushed through their majority-controlled respective legislatures. Most people still don't know about it.

It applies NAFTA-like tribunals to enforce the synchronization of regulatory laws between the provinces (which includes overriding and municipal regulations) by rewarding up to $5 million in compensation to a company who believes that it doesn't have as favorable restrictions as other parts of the province.

And people think America is the only country with this kind of bullshit. We're 10 years behind you guys, and that's being optimistic.
posted by Pseudology at 9:23 PM on December 28, 2008

It's interesting to compare the discussion of this to the discussion of Medellin here a few months ago. The underlying legal issues seem pretty similar.
posted by Mr. President Dr. Steve Elvis America at 12:19 PM on December 28 [+] [!]

Indeed they are. Before Canada had a real constitution (by that I mean one that couldn't be changed on a whim by the British Parlaiment and had no mention of constitutional rights AKA the British North American Act) this was the only way anyone could strike down a law. It also predated our Supreme Court (1949) so all these cases were taken before the Judicial Committee of the Privy Council in Britain and the judges there hated big government so they made their rulings accordingly:

Voting rights: federal (striking down BC's law banning Chinese, defined by law as all asians, from voting)

Medical System: Provincial (made in the great depression so there was no way a province could afford a could one. The Canada Health Act was later established where the federal government would kick in 50%. Thanks to budgetcraft that number is now about 18% or at least it was in 2005. Thanks federal Liberal party!)

Law enforcement: Provincial (only Ontario and Quebec choose to exercise this right. Otherwise it's just the local cops and the RCMP)

Pension: Provincial (only Quebec chooses to exercise this right and have a seperate Pension plan. This has been used to artifically inflate/deflate stock and dollar values in a way that made a seperated Quebec seem like it wouldn't be the economic sink it would likely become*)

Alcohol Prohibition: Provincial (The JCPC spared us prohibition, I still haven't figured out why this doesn't apply to the controlled drugs and substances act.)

*side note. The Quebec seperatist party, the Bloc Quebecois have already drafted both interm and long-term constitutions. I got them from their shadow justice minister at a political science students conference. They're quite interesting (three-tier not-withstanding clause, guarunteed freedom of conscience, legally requiring life-saving assistance if it can be provided) but they somehow forgot to write them in English as well so the English Quebec residents could read them. Go google translators!
posted by Pseudology at 10:46 PM on December 28, 2008

What the province is basing at least one of their arguments on is a 1911 agreement that gave resource rights to Abitibi (or one of its predecessors) as long as they operated the mills. No mills, ergo no resource rights. One of the considerations the court will have to make is if this agreement has precedence over later treaties, particularly since Newfoundland has was an independent colony at the time.
posted by Chuckles McLaughy du Haha, the depressed clown at 6:38 AM on December 29, 2008

The softwood lumber agreement, an "agreement" that is fundamentally counter to the principles of NAFTA, is what is killing lumber companies in Canada.
posted by KokuRyu at 9:03 AM on December 28

You have no idea what you are talking about, or at least haven't read the news in two years. Work in the industry for a while and see what you learn.
posted by Kickstart70 at 1:14 PM on December 29, 2008