Processing Magazine

Canadian Government, AbitibiBowater Reach Settlement

August 25, 2010

According to the Associated Press, Canada has agreed to pay AbitibiBowater more than $100 million to settle the company''s claim over what it said was an illegal seizure of its assets. The forestry company had sought $500 million under the provisions of the North American Free Trade Agreement after Canada''s Atlantic-coast province of Newfoundland expropriated some of its assets. The province took the measure after AbitibiBowater closed a Newfoundland mill in 2008 and said it would lay off an estimated 800 workers in Grand Falls-Windsor, a town of 13,500. The company''s action sparked outrage, prompting the Newfoundland government to pass a bill expropriating the company''s timber and water rights. The company, which has administrative headquarters in Montreal, has now dropped its suit in return for more than $123 million.