HALIFAX - The Vancouver company that was planning to buy the idle NewPage paper mill in Cape Breton has backed out of its bid, saying its failure to win a favourable tax ruling from Ottawa effectively killed the deal.
Pacific West Commercial Corp. issued a statement late Friday saying a favourable tax ruling from the Canada Revenue Agency was a critical factor in ensuring the economic viability of the mill at Point Tupper.
The company said that despite the provincial government's efforts to come up with a compromise, both parties decided the tax implications could not be overcome without compromising the long-term competitiveness of the mill.
"It is extremely disappointing for everyone involved in the year-long effort to restart the mill to realize that we have been unable to achieve our collective goal, and that our vision of a world class, competitive, paper manufacturer in Port Hawkesbury will not be realized," company president Ronald Stern said in the statement.
Premier Darrell Dexter issued a statement minutes later saying he was disappointed on behalf of the people and businesses in Port Hawkesbury.
He said the company's move will be devastating for the mill's workers and their families.
"The province fought as hard as it could for those jobs because this government knows good jobs are the lifeblood of rural communities," Dexter said.
"There are some who would have been happy for us to turn our backs on those workers and their families the day it was announced that the mill would be idled. Even though we could not reach a deal in the end, I can proudly say that we did not abandon those people and we will not do so now either."