The Corner Brook Pulp and Paper mill, pictured in this 2003 photo, has received an extension to its tax exemption from the provincial government. — File photo by The Canadian Press
The Corner Brook paper mill got another financial boost from the provincial government last month, when the provincial cabinet quietly extended a tax exemption until at least 2017 worth around $6 million.
In an order in council issued by the provincial cabinet in early March, the government waived the “managed land tax” for a period of five years, from the 2012/13 budget year through to 2016/17.
Natural Resources Minister Tom Marshall said the tax break has been in place since a previous restructuring effort at the mill in 2009, and the government chose to extend it for five years as the mill struggles to remain financially viable.
“If the paper mill goes down, I’m advised that the sawmills will go down as well,” Marshall said. “It’s not just one plant; it’s the whole industry.”
Marshall said that the company is currently in negotiations with skilled trades workers trying to hammer out a long-term deal when it comes to labour issues.
If the company comes up with a long-term sustainability plan then the government is ready to step in with some sort of financial support.
“Government determined that it is going to provide support to Corner Brook Pulp and Paper,” Marshall said. “So obviously there’s money provided for in the budget to help provide that financial assistance.”
There’s a $90-million mystery pot of money set aside in the 2013 budget for unspecified “business opportunities” or “industrial development.”
When Marshall was asked if the money for Corner Brook Pulp and Paper would come from that $90 million mystery fund, he said, “It’ll come from a number of places.”
Neither the Liberals or the NDP objected to the government’s decision to extend the tax exemption for five more years.
But Liberal Leader Dwight Ball said he’d like to see the whole picture now, instead of having the government try to support the paper mill bit by bit.
“What we’ve seen here is kind of this piecemeal approach,” Ball said. “What we need now is to get a commitment from the company that kind of matches with the type of commitment that current employees and even retirees have made.”
New Democrat MHA Christopher Mitchelmore also said in the short term, the government needs to help the company stay afloat.
“In the very short term, without Kruger, it would basically have a devastating impact on the west coast, central and the Northern Peninsula,” he said. “I’ve been talking to the municipality (Corner Brook). I’ve been talking to stakeholders here. There’s a lot of concern and a lot of tension here in the street. A lot of people feel vulnerable about their jobs.”
Marshall said demand for newsprint is falling around the world, but he believes that if the government can help keep the Corner Brook paper mill afloat for a few years, they’ll be OK.
Basically, with too many mills producing paper for the marketplace, the hope is the Corner Brook operation can just ride it out until some other paper mills somewhere else in the world close up shop.
“Newsprint capacity comes out of the system as mills shut down,” he said. “The company has to make the decision as to whether or not this mill can be a viable operation, and that’s a process they're going through.”