Details won’t be released until terms of deal are done
Corner Brook Pulp and Paper will get at least part, if not all, of the $90-million mystery fund allocated in the March 2013 provincial budget.
— Western Star file photo
The details are scanty, confusing and secret so far, but the provincial government said Wednesday it will give Corner Brook Pulp and Paper a loan of $90 million — probably.
In the House of Assembly, Natural Resources Minister Tom Marshall revealed the worst-kept secret in Confederation Building: a $90-million mystery fund in the provincial budget is set aside for some sort of financial aid to the Corner Brook paper mill.
“I am pleased to stand and inform this honourable House that the provincial government plans to assist Corner Brook Pulp and Paper Ltd. with a $90-million loan,” Marshall said.
But only an hour or so later, Premier Kathy Dunderdale told reporters it’s possible not all of the money will go to the Corner Brook mill, and until it’s all finalized, she won’t tell anybody what the terms of the financial agreement are.
“Near enough, $90 million is going. The details, you’re going to have to wait to get,” Dunderdale said to journalists outside the House. “If Corner Brook Pulp and Paper is successful in its negotiations with its unions, there’s going to be an arrangement between the government and Corner Brook Pulp and Paper that’s going to see the bulk of this money go to Corner Brook Pulp and Paper under a number of terms.”
Since the provincial budget was released March 26, opposition parties have been hammering the government for details on the $90-million line item in the budget.
Until today, it was widely believed the money was earmarked for the struggling Corner Brook mill, but Dunderdale and her ministers would only say they couldn’t give details because financially sensitive negotiations were ongoing.
Then, in a testy back-and-forth exchange with NDP Leader Lorraine Michael in Estimates Committee in the House of Assembly Wednesday morning, Kennedy said that even by asking questions about the money, Michael is threatening the future of the Corner Brook mill.
“These questions that you’re asking certainly put into jeopardy everything that’s going on,” Kennedy said.
Estimates Committee is an annual process where opposition politicians get to question government ministers and their top bureaucrats about the budget allocations. It tends to be a less politically charged environment than other House of Assembly proceedings, and ministers are frequently more forthcoming and unscripted than at other times.
At first, when Michael asked about the money, Kennedy only assured her that it was needed for “ongoing discussions” and he said it’s not for Nalcor.
Kennedy said the money is essentially sitting there on the books, in case an agreement is reached, so the government can quickly spend the money if need be.
“We have to have money in terms of negotiations ongoing,” he said. “The money is there to allow for an expeditious resolution if an agreement is reached.”
At first, Kennedy wouldn’t reveal what the money was earmarked for; instead, he cryptically said, “I think everyone in the room had an idea of what this is about.”
When Michael asked him point-blank whether it was for Kruger Inc., which owns the Corner Brook mill, Kennedy confirmed it was.
Dunderdale said the plan all along was to make an announcement Tuesday afternoon, and they knew the question would come up in the morning committee meeting, so she instructed Kennedy to reveal the money is for Corner Brook Pulp and Paper.
The government has said for months that if the mill owners can come up with a long-term sustainability plan with the unions that represent workers in the mill, there will be some sort of government assistance to make the mill more economically viable.
In principle, that’s something Liberal Leader Dwight Ball said he supports, although he added the caveat that he needs more information about the terms of the loan before he can endorse it.
Michael said she also needs more details.
West coast Liberal MP Gerry Byrne also weighed in on the situation. He said he has studied the mill’s economic position in detail and is convinced it’s a good use of taxpayers’ money, assuming the deal is structured well.
Byrne said the biggest need at the mill is upgrading the equipment and facilities. If the money is spent on capital upgrades, it can be one of the most cost-effective paper mills in North America, he said.
“This mill is in a winning position. It just needs that investment,” he said. “There’s no doubt about it. In my mind, this is a low-risk loan. You will not only see this money paid back, but you will see the mill operate for decades.”