Government makes decision on Abitibi Consolidated�s non-renewable licences

Premier Roger Grimes, Minister of Forest Resources and Agrifoods Rick Woodford and Labour Minister Anna Thistle, announced today that government has agreed to a medium term solution regarding Abitibi Consolidated Company of Canada�s 99-year non-renewable timber licences.

The company holds 38 non-renewable timber licences totaling 965,585 hectares, which expire at 10 different dates between 2002 and 2021. The first of these, which represents approximately 380,000 hectares, expires this year.

Premier Grimes said government has agreed to harmonize the expiry dates to 2010. "We have considered and explored a number of options and we believe harmonizing the due dates of all licences is the preferred and most prudent option. Government will seek an amendment to the Forestry Act to facilitate the 2010 common expiry date initiative."

The Premier added that the 2010 common expiry date is contingent upon the company maintaining its current production levels at the Grand Falls-Windsor mill, which includes a two-machine operation.

The common expiry date will result in the company consenting to roll back the expiry dates of its longer term licences, between 2010 and 2021, to the 2010 expiration date and the government extending the earlier expiration dates to 2010. The 2010 date was decided based on a weighted average of the expiry dates of all non-renewable licences and the area (hectares) contained in each licence.

Premier Grimes said the 2010 common date allows time for the development of future land tenure arrangements for all of the timber licences at one time instead of a fragmented approach. "This will allow ample time for research on future land tenure systems, public consultations, as well as input from various government departments. The agreement demonstrates government�s commitment to a sustainable forest industry and environmental integrity of our forest ecosystem."

The Premier also commented on the management regime and payments by the pulp and paper companies. He said quite onerous management responsibilities have been imposed on the forest industry through the Forestry Act and other legislation to the extent that Newfoundland and Labrador has one of the most intensive management of the forest resources in Eastern Canada.

"The two pulp and paper companies are paying over $20 million per year towards forest management, such as silviculture, protection and road building, most of which will have to be paid by the taxpayers if the licences revert back to the Crown," said the Premier.

Minister Rick Woodford said that while harmonizing Abitibi�s licences does not address the long term wood supply issue, he is satisfied that it is a step in the right direction. "Rolling the company�s licences into a single expiry date is a prudent decision and will give government reasonable time to deal with the longer term issue, which will involve comprehensive public consultations before the 2010 expiry date for all of Abitibi�s licences."

Minister Woodford said that implementing a new tenure agreement with Abitibi Consolidated that furthers its goals and objectives of modern and sustainable forest ecosystem management is a priority for government. He said government�s focus will be on developing a new 20-year forest management agreement upon the expiry of all of Abitibi�s non-renewable licences, which will bring our province in line with modern tenure arrangements being introduced across the rest of the country.

"I wish to make it clear, however, that government is proud of the strides it has already made in delivering modern forestry management. We have very progressive forestry legislation which requires licence holders to manage the resource on a sustainable basis using sound ecological principles."

The minister added that Newfoundland and Labrador has very stringent requirements under forestry and environment legislation for holistic management of our forest resources for multiple values.

Labour Minister Anna Thistle said the harmonization of licences will in the short to medium term, provide security for mill workers and communities in the province which depend on the forest industry. She said it will also remove any short term uncertainty for the company regarding fibre supply at the Grand Falls-Windsor mill. This agreement also provides stability to the sawmill sector, which is involved in cooperative arrangements with the company.

"This agreement represents a milestone for the Grand Falls-Windsor mill and is a renewed opportunity for Abitibi-Consolidated and the union to work in partnership on improving the labour relations climate at the mill," stated Minister Thistle. "I am extremely grateful to both the company and the union for the patience and professionalism they have accorded to me and officials in my department over the past number of months during numerous meetings and discussions on this matter.

"My department will continue to provide whatever support and assistance necessary to ensure we have a solid and secure operation built on sound labour relations practices and high productivity. This is what the company wants, this is what the employees want and this is what is needed for the area."

Ministerial Statement

Media contact:

Carl Cooper, Communications, Office of the Premier, (709) 729-3960.
Sonia B. Glover, Communications, Forest Resources and Agrifoods, (709) 729-6183.
Kathy Dicks-Peyton, Communications, Labour, (709) 729-1741.

2002 11 26                                        9:45 a.m.