OTTAWA – New Democrats are calling for committee hearings into the Harper government’s $130 million payout to Abitibi Bowater after the company threatened a NAFTA challenge in its dispute with the province of Newfoundland and Labrador.

“Barely six months after Abitibi Bowater filed its notice, the Harper government caved and Canadians are now on the hook for $130 million of their hard earned money,” said NDP International trade critic Peter Julian (Burnaby-New Westminster). “This record settlement under NAFTA sets a dangerous precedent and Parliament needs to look at its ramifications.”

On Friday, Julian submitted a motion to the International Trade Committee to start hearings into the Abitibi Bowater deal and into the impact of this settlement on future decisions taken in the public interest.

Although the corporation is essentially a Canadian company with its head office in Montreal, it was incorporated in Delaware, an American State that serves as a tax haven for many corporations. This technicality allowed Abitibi Bowater to file claim for compensation from the federal government under NAFTA.

“The fact that Abitibi Bowater incorporated in a tax haven, while conducting all of its business in Canada, raise serious question as to whether the filing of a Chapter 11 lawsuit was even allowable in this case,” said Julian. “This matter should fall under the purview of the Canadian courts, not some unaccountable trade panel.”

Abitibi Bowater filed the notice of action in response to the expropriation of its timber and hydropower rights in Newfoundland by the Danny Williams government in 2008. The expropriation, supported unanimously by the Newfoundland and Labrador Provincial Assembly, came as a result of the company defaulting on its commercial obligations in Newfoundland. Abitibi Bowater closed down their century old pulp and paper mill in Grand Falls – Windsor laying off of 700 workers and leaving behind costly environmental damages.

“Despite the fact that NAFTA tribunals do not meet the basic standards of representative justice, the Prime Minister stated that he will create a trade mechanism that forces provinces to pay for settlements related to disputes under international trade deals signed by Ottawa,” said Julian. “Why should the provinces be held accountable for irresponsible and inappropriate pay offs made by the Harper Government?”

“Harper has throw open the door to other corporate opportunists. This will strongly impact future decisions taken in the public interest by democratic governments and further erode Canadian sovereignty. Parliament must close the door on this dangerous trend,” concluded Julian.