Nova Scotia announces investment in Bowater Mersey mill in Brooklyn to help enhance facility's long-term sustainability, including C$25M loan for energy projects, purchase of 25,000 acres of company-owned land for C$23.7M

Sandy Yang

HALIFAX, Nova Scotia , December 2, 2011 (press release) – Premier Darrell Dexter acted today, Dec. 2, to protect about 2,000 jobs affiliated with the Bowater Mersey pulp and paper mill in Queens County with a provincial investment in energy, innovation and productivity improvements at the facility.

The investment is part of a larger effort to support the Liverpool mill and its workers, and will give the facility a new lease on life, the premier said.

"I want to thank all those involved for their hard work and commitment to find an acceptable solution to this incredibly difficult situation," said Premier Dexter. "This mill is a major employer on the South Shore, and throughout southwest Nova Scotia. If it closed permanently, it would be a devastating blow not only to the hundreds of workers and their families, but to the economy of the surrounding area and the entire province."

The investment includes a $25-million capital loan through the Nova Scotia Jobs Fund for a long-fibre refining project, which will reduce electricity consumption at the mill. The loan will also be used to build a topping turbine at the nearby Brooklyn Energy Power Plant, to produce additional renewable electricity.

"We're pleased to move forward and improve the competitive position of our paper mill in Nova Scotia," said Richard Garneau, president and chief executive officer of Resolute Forest Products. "Today's announcement would not have been possible without the hard work and determination of so many. In particular, I would like to recognize our employees for their willingness to bring important savings to the table, as well as the leadership of Premier Dexter and the quick response by his government.

"Today's developments demonstrate how much can be accomplished in a short period of time when parties are committed and work in a spirit of collaboration."

As part of its multi-million-dollar plan, the province has agreed to buy 25,000 acres of company-owned land, some of which may be used toward the province's goal of 12 per cent protected lands by 2015. The total price of the land purchase is $23.7 million.

Bowater Mersey will use those proceeds to help enhance the long-term sustainability of the paper mill. The land purchase will be finalized by March 31.

The company has agreed to allow public access to some of its land, as requested by the province. The agreement also provides a five-year option to purchase an additional 50,000 acres of company-owned land.

The agreement includes $1.5 million for workforce training through the Productivity Investment Program, part of jobsHere, the province's plan for economic growth. This investment allows employees to upgrade their skills between 2012 and 2014, as a result of capital improvements to the mill.

"It's important to note that we would never have gotten to this point if the company hadn't agreed to reconsider its position and work with the province on an alternative to closing down the mill," said Premier Dexter. "I'm pleased that the company was able to turn a corner and is now recognizing what the province has known all along - that this mill can be a viable operation."

Further details of support for the mill include a new agreement with the union, a tax break from the Municipality of Queens and contributions from the Port of Halifax and Nova Scotia Power.

Last month, employees at the mill voted 104-97 in favour of accepting concessions from the company, including layoffs, in an effort to try to keep the mill operating.

"Our local members took the first step and made a very tough decision regarding their contract and manning levels," said Charles Shewfelt, vice-president of the CEP, Atlantic Region. "It is good news that the government has been able to take the next step to give the mill a viable future."

"Everyone has a part to play in saving the Bowater mill," the premier said. "People recognized that and stepped up to the plate. The province's support is just one piece of the puzzle. This is a smart investment that protects thousands of rural jobs and helps keep a major player in the manufacturing and pulp and paper sector here in Nova Scotia for years to come."

The company has agreed to work with the province to explore further innovative measures to provide long-term, economically viable opportunities that support the mill and the local economy.

This support is being provided to the pulp and paper mill alone, and is consistent with the softwood lumber agreement. Bowater Mersey is restructuring its separate Oakhill mill lumber operations to ensure that none of this support benefits softwood lumber production.

The premier will soon introduce legislation supporting the province's investment in the mill and its workers.

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