Nova Scotia's premier, defense minister, pledge to explore ways to prevent shutdown at NewPage Port Hawkesbury, but contractors worry about getting paid after company misses two scheduled payments

LOS ANGELES , September 7, 2011 () – Nova Scotia's defense minister Peter MacKay has commented on the imminent closure of NewPage Port Hawkesbury Corp.'s paper mill at Point Tupper during a visit to Halifax, The Chronicle Herald reported on Sept. 6.

Miamisburg, Ohio-based NewPage announced last month that it would implement downtime on both of the mill's paper machines, halting production on the PM1 newsprint machine on Sept. 10 and the PM2 supercalendered machine on Sept. 2.

MacKay, who was in Halifax to announce funding for a security summit, said the closure was the result of a number of complex issues including energy and tax rates. He said he had spoken with Premier Darrell Dexter and others about the closure, which affects 1,000 workers.

The government of Nova Scotia is expected to announce a lumber strategy later this week that could help up to 400 forestry workers find work elsewhere in the province. MacKay said he had been told that Northern Pulp and Bowater Mersey may have some capacity.

The impending closure overshadowed Labor Day events as contractors and businesses who have carried out work for NewPage Port Hawkesbury worried about whether they would get paid after the company missed two scheduled payments last week.

Premier Dexter said the province would continue to meet with worker and company representatives to explore ways to shorten or prevent the shutdown. He said the government needed to figure out whether the mill could continue to operate if NewPage files for bankruptcy protection, either through a new ownership model or a restructuring.

NewPage has a lease on more than 600,000 ha. of Crown woodland in the region, a "hurdle" the premier said would have to be overcome.

Rick Clarke, president of the Nova Scotia Federation of Labour, said he planned to meet this week with the union representing workers at the mill - the Communications, Energy and Paperworkers Union's Local 972.

The high cost of electricity is seen as playing a key role in the mill's financial problems. Clarke and Kyle Buott, president of the Halifax-Dartmouth and District Labour Council, suggested the province should take over Nova Scotia Power Inc., but Dexter said he had no plans to add to the province's debt by acquiring the utility.

On Wednesday, NewPage Corp. issued a statement saying it had commenced voluntary cases under Chapter 11 of the United States Bankruptcy Code. The cases are pending in the United States Bankruptcy Court for the District of Delaware.

NewPage also stated that its Canadian subsidiary, NewPage Port Hawkesbury Corp., has brought proceedings before the Supreme Court of Nova Scotia under the Companies' Creditors Arrangement Act of Canada.

The primary sources of this article are The Chronicle Herald, Halifax, Nova Scotia, on Sept. 6, 2011, and a statement issued by NewPage Corp., Miamisburg, Ohio, on Sept. 7, 2011.

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