Extension of C$6M tax exemption for Kruger's Corner Brook Pulp and Paper mill in Newfoundland until budget year 2016-2017 approved by province, but funding will be withheld until mill sets up long-term sustainability plan

LOS ANGELES , April 11, 2013 () –

Kruger Inc.’s Corner Brook Pulp and Paper Ltd. mill has received an extension until budget year 2016-2017 for a C$6 million tax exemption from the province of Newfoundland and Labrador, The Telegram reported April 11.

The "managed land tax" exemption had been in place since 2009, when the mill had undergone a restructuring effort. The extension is aimed at helping the struggling mill with its financial viability, according to Natural Resources Minister Tom Marshall.

Once the mill sets up a sustainability plan for the long term, the province will provide financial support to help the mill, Marshall said.

The Telegram reported that the government has set aside a $90-million pool of money in the 2013 budget. When asked if part of that funding could go toward the mill, Marshall said that the financial support would “come from a number of places.”

The Corner Brook mill is in the middle of labor negotiations with skilled trades workers.

Marshall said that a shutdown of the Corner Brook mill could affect sawmills, as well as the entire industry in the area. Provincial government officials from both parties support helping the mill, The Telegram reported.

Kruger is currently in the process of trying to determine if the Corner Brook mill is viable for the long-term, Marshall said.

New Democrat MHA Christopher Mitchelmore said that the loss of the Kruger mill would incur “a devastating impact on the west coast, central and the Northern Peninsula.”

While newsprint demand is diminishing globally, Marshall hopes that the province can help the mill stay viable during these tough conditions, which could force other mills around the world to close, The Telegram reported.

The Corner Brook mill has an annual production capacity of 360,000 tonnes of newsprint, according to Kruger’s website.

The primary source of this article is The Telegram, St. John's, Newfoundland, and Laborador, on April 11, 2013.

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