Monday, September 18, 2006

Barry picks up Harbour Breton plant for $1


I'm not sure why this has come as a big surprise to the Town of Harbour Breton nor why Minister Rideout is apparently raising objections to it.

It's been a long-standing policy of the provincial government to limit potential liabilities to itself. While this might seem sensible on the face of things and unrelated to this issue, in fact this concern goes to the heart of this $1 transfer to the Barry Group*.

In this province, as in all other provinces, municipalities are creatures of the provincial government. That's why the Confederation Building pays keen attention to, and closely regulates, how much debt the municipalities take on. At the end of the day, no matter what the intentions of a town or city council, if things go very badly then it's the province that's on the hook.

That's why the province won't let towns buy federal wharfs or ports when they become available. Or airports either. All these infrastructures are transferred to outside organizations, not municipalities, to limit liability except in very rare cases.

In this case FPI does not care where the $1 transfer fee comes from. It doesn't matter to them if it comes from the town, the provincial government or the Barry Group.

Rideout may say today that the deal is illegal and needs cabinet approval but that sorely confuses the issue. The fact is that, as mentioned today on the Fisheries Broadcast, the Premier's Office knew of the sale from FPI to Barry last Friday. And, significantly, Rideout never says that government won't approve the deal.

One thing for sure, the province is not going to let the town take it over and in that action the province will do the right thing. This way it's the Barry Group who will assume full liability for any problems at the plant, including environmental problems.

The option of the town buying and then leasing out the facility was always a fleeting one with no support other than in the Town Council and its allies. In any case that option is gone now.

It would be interesting to know what are the estimated liablilties associated with the take-over of the plant. That would tell you how much the province was not keen to fork over to help the town.

And why not tell the Town of Harbour Breton in advance and explain the facts rather then letting them hear the news from the media instead of the minister? I can only assume it's yet another manifestation of government's severe allergy to bad news.

*It's also the issue at the heart at the dogfight between the government and INCO over the placement of the hydromet facility in Long Harbour over Argentia.

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