Last mill standing

Send to a friend

Send this article to a friend.

It’s a battle on paper — or, at least, over paper. In the past few days, Kruger and its paper mill workers in Corner Brook announced they’ve reached an agreement on paying back the shortfall in the company’s pension plan.

“These relief measures were essential to the mill’s ability to compete in the market and will enable the company to pursue its assessment of the mill’s long-term viability," the company said in a Friday news release.

“The next step will be for the company to present a sustainability plan to its lenders and to the Newfoundland and Labrador government within the coming weeks.”

Meanwhile, on Monday, the Nova Scotia provincial government announced a $124.5-million bailout to help reopen the NewPage paper mill in Port Hawkesbury, bring the total provincial commitment since the mill shut to $155.9 million. Part of the funding will help the new owners trim costs — and, as always, one of the largest costs involved is labour. Part of that money includes $40 million in the form of an operating loan. There’s also $26.5 million in forgiveable loans.

The mill is also expecting preferential electrical power rates — and is hoping for an as-yet undisclosed tax benefit from the Canada Revenue Agency.

The tradeoff for the province? Nova Scotia Premier Darrell Dexter argues the mill supports 1,400 jobs in rural Nova Scotia, and provides taxes and stumpage fees that total between $14 million and $16 million a year. The company also says it will spend $165 million annually on payroll and other costs.

The NewPage mill is a relatively new one and produces supercalendared paper used for magazines, rather than newsprint. but that doesn’t mean its example should be lost on those wondering about the future of papermaking in this province.

More and more, reductions in paper volume are winnowing out the industry’s high-cost plants. It’s not a matter of whether a mill is competitive on most fronts. Mills that last will have to be successful on all fronts, and that includes being successful in being able to wrangle concessions not only from their employees, but from province and state governments as well.

So far, Kathy Dunderdale’s government has maintained it is not interested in getting into the operation funding of the Corner Brook operation. That mill has already benefitted from more than $40 million in provincial help, but has still not been able to find sound financial footing.

And the paper field shrinks every day.

Catalyst Paper announced the permanent closure of its Snowflake, Ariz., recycled paper operation on July 30.

Verso announced the permanent closure of its Sartell, Minn., mill on Aug. 1 after a fire and explosion.

During the last two weeks, newsprint paper machines in Italy and on the Pacific Rim were shut down due to declines in newsprint sales.

There will be survivors in the paper industry.

The question is how close to the bone those operations will have to work, and how much governments are willing to put themselves on the hook to support the industrial jobs those mills represent.

The ante gets upped every day — and looking next door at the latest $156-million pot, it’s hardly a game for the faint of heart.

Organizations: Canada Revenue Agency.The, Catalyst Paper

Geographic location: Corner Brook, Nova Scotia, Newfoundland and Labrador Port Hawkesbury Snowflake, Ariz. Sartell, Minn. Italy Pacific Rim

  • 1
  • 2
  • 3
  • 4
  • 5

Thanks for voting!

Top of page

Comments

Comments

Recent comments

  • Winston Adams
    August 23, 2012 - 09:55

    John Smith, you know I never said CB mill power was a complete answer. But your experts, Manitoba Hydro Int stated its importance. The primary solution is heating efficiency where if offers some 600 MW of recoverable energy at a quarter of the cost of Muskrat falls. Now you say your're all for efficiency, but your honesty is in question. 1. You spin it to suggest that efficiency means turning down the heat and turning off lights. You suggest it means to ration electricity. The opposite is true. For the same amount of electricity you get more than twice the amount of heat, or the same amount of heat for half the electricity and half the cost. I thought you could grasp that . Or do you wish to keep people in the dark by promoting false information. 2. the intelligent plan of Muskrat has no room for the application of efficient heating for the home owner and small business. Vertmont out classes Nalcors engineers in that by more than 10 to 1 . This leaves their Take Charge program as a Newfie joke. In my opinion it is shameful that you spin and distort the facts on efficient heating.And you further discredit the engineers at our power companies who should know the facts but have no mandate to be serious to help their customers in this. I am not against Muskrat Falls power, just at this time and this high cost. And again, you spin the idea that there are people who want to derail MF for personal or political gain, but this is unfair to the many critics who have no such motives. You say you want to see someone like the lawyer group to have a 10 inch high stack of paper with studies to prove their alternatives are better. My alternative was presented to the PUB in about 10 pages. Where is the criticism of that, except your comments " it's a nice idea but it won't fly" Why can it fly in Vermont but not in Newfoundland? Newfoundland just has too much hot air maybe. John, you say you want to debate the issues. Why do you not debate with facts? Facts. Truth. It has more weight to argument than opinion. Your opinions seem not to be worth much to most who read this forum, because they are mostly not factual , nor based on facts. Try to do better. Say to yourself, " before I say this , hmmm, I must do a little research, least I be wrong, and then feel ashamed.

  • Winston Adams
    August 22, 2012 - 13:30

    Cold Future, we only have a potential power problem in winter due to our heating load. If it was possible for the CB mill to operate for 8 months and Deer lake power be available for our winter heating, it would be ideal and also save oil at Holyrood, as this power costs about 14 cents per kwh. Deer lake power for heating knocks about 800 million against the present cost benefit of MF.

    • John Smith
      August 22, 2012 - 15:51

      Winston...that's now...now in 2012 we already have difficulty meeting demand. What will it be like in 20 years from now? I know it would be so nice if we could all shut off the lights, and turn off the heat and live like that...I'm sure to you that sounds fantastic...but to the rest of us, it does not. We will have to meet a growing need for power for industry and residential use. Vale alone will require nearly 100 megawats. We have to look down the road and see what makes most sense. What makes most sense is to build muskrat, get off oil, start paying into our own resource, and sell off the additional power on the spot market for hundreds of millions a year. Muskrat is the intelligent, well thought out answer to our future needs, and is part of a greater picture which will involve the UC and Gull Island and even Bay D'espoir. It's just a shame there are people who want to derail this project for their own personal or political gain...shameful...

  • Cold Future
    August 22, 2012 - 12:35

    Should a business be permitted to survive if it can only operate on the backs of the people? NS will not have cheap power to dole out to their industries until Muskrat falls is completed in 2020. As for Corner Brook pulp, we the people would be better off if the mill would close. It would save goverment money-no subsidy required. We get the power back from Deer lake, avoid the excessive cost of Muskrat and its associated back breaking rate increases.

    • a business man
      August 22, 2012 - 18:32

      as a business investor, I say that a business that cannot survive without government handouts should close. I have had businesses that have failed, and I had to close it down. No one cared about my employees (not that I did because I didn't), so what makes protecting these jobs so important. Anyways, i don't want my tax dollars supporting this mill, and I therefore hope the mill closes. It is unjust for OUR tax dollars to be used to protect the jobs of a select few when in fact the money could be used to improve health care and other social services for ALL. The death of the mill means more money for social services, so I vote for the mill's death.

    • What a load
      August 23, 2012 - 09:51

      LMAO, now the "business man" is concerned about social programs. Just can't keep the story straight can you.

  • WaJ
    August 22, 2012 - 07:49

    Somewhere in Siberia a deer is farting and everywhere in NL people are blaming it on Nalcor.

  • W Bagg
    August 22, 2012 - 07:11

    NS will soon be able to sell very cheap power to the mills and other industrial, us not so much, at least not without the residential rate payers subsidizing the industry.

  • Derrick
    August 22, 2012 - 06:24

    In NS it is easy to give mainland money to somebody else, in NF we need the money for Nalcor and it is our money. Newsprint is dead let it die. The forest is worth more as a carbon sink.