http://www.peoplestandup.ca/ndp.htm
Nova Scotia is throwing Bowater Mersey Paper Co. Ltd. a $50-million lifeline over the next five years to keep the paper mill afloat.
The deal, announced Friday, includes a grant of $25 million to help overhaul the newsprint-making process at the mill near Liverpool.
Mason echoed that.
"With the reduction they're expecting or hoping for in their manufacturing costs, this doesn't sound like it's going to be sufficient to meet their requirements. It seems like it's going to come up short, I would think, from this.
The new load retention rate would save both Bowater and NewPage at least $14 million in the first year and $20 million in the final year.
But faced with a declining demand for newsprint in North America, Mason said he thinks it is inevitable that at least one or two mills would shut every year.
"All these concessions do is buy you time," he said, noting that it is possible that the industry will see demand drop by 500,000 tonnes next year.
"So you're in a situation where every single year, probably for at least the next four or five years, you're going to need at least one or two mills the size of Bowater Mersey to shut in North America. It's a war of attrition and you know there's going to be closures," he said. "Even if you get all these concessions, there's no guarantee that a couple of years down the road you're not going to be back facing a (shutdown)."
Seth Kursman, spokesman for Resolute Forest Products, said it is too early to determine if the new rate meets the company's requirements for keeping Bowater open.
Bowater will also use the money to pay down debt and for energy efficiency upgrades that will save between 10 and 12 per cent per year on power and $5 million a year will be forgiven from its loan if it maintains its operations.
Another $1.5 million is to retrain Bowater's workers over two years.
The provincial government also said it will spend $23.75 million to buy 10,117 hectares of land from the company to give it a cash injection.
The company could receive an additional $40 million if the province exercises an option to buy up to 20,234 hectares more from the company.
Premier Darrell Dexter heralded the deal as a way to protect jobs in rural Nova Scotia.
"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," Dexter said in a statement.
Richard Garneau, CEO of Resolute Forest Products, the company that owns the mill, signed an agreement Thursday to maintain the plant for five years.
"As for the future, it is certain with the investments announced today, it will put the mill in a better position to compete in the longer term," Resolute Forest Products spokesman Pierre Choquette said in a call to CBC News from Montreal.
The mayor of Liverpool was also happy about the announcement.
"It's not lost on me that exactly a month ago today exactly, we were staring into the abyss, thank you very much and Merry Christmas," said
The company had threatened to close the mill if it didn't get help from the province and others. It said the cost of fibre, labour and electricity were too high.
The company — formally known as AbitibiBowater — paid two former executives $4 million for helping it emerge from creditor protection.
Last month, unionized workers voted for a new collective agreement that eliminates 80 full-time jobs.
The company also got a three-year discount on electricity, though it asked for five years.
There were no representatives from Bo-water or its parent company at Friday's announcement
The new three-year power rate announced on Tuesday may not be enough to save the Bowater Mersey mill in Brooklyn, Queens County, analysts say.
The Nova Scotia Utility and Review Board released its decision yesterday on a bid by Bowater Mersey Paper Co. Ltd. and NewPage Port Hawkesbury Corp. to get a special discount power rate.
Resolute Forest Products Inc. of Montreal, which owns 51 per cent of Bowater Mersey, is seeking new cost cutting measures in order to keep the mill open past Jan. 1.
It is being reported that they are looking at reducing labour costs to $80 per tonne from $97, and manufacturing costs to $480 per tonne from $537.
Earlier this month, the union voted 51.7 per cent in favour of concessions that would see more than 100 employees cut from the workforce.
Queens County also approved a 10-year freeze on property taxes, which would amount to savings of $135,000 a year for Bowater.
The new load retention rate might not represent enough of a discount to satisfy Resolute Forest Products, said Paul Quinn a forestry analyst with RBC Capital Markets in Vancouver.
"It sounds good, but I'm not sure it's enough. (Resolute Forest Products) wanted relief on three things - labour, energy and fibre," he said.
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Yes management got a huge bonus while working class get the shaft
9693297602 3 weeks ago
Why? That's easy because humanity is lost by the evil that has been controlling them for a very long time, they plan to collapse the free society and establish world control under the guise of keeping us all safe and CONTROLLED then they can manage the "Citizens of society" (Formerly known as slaves) the new world order idea of society is worse then 1984, if you don't search for the truth now and don't stop until you get it ALL, then I pity the WORLD will be no more as we know it
UKBLIVE 2 months ago
it was 2,000 jobs for a couple of years.. for $90 million.. with the loss of 80 Unionized Jobs and Wage Freezes. YAY! the 3rd World can not come to North America soon enough!
JWnFL 2 months ago
Give me 50 Mill I'll create 81 Jobs.
newzyoucanuse 2 months ago
I think that says it all!
snowcatns 2 months ago
I could also be more competitive if given $50 000 000 :)
repawnd 2 months ago