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Government investment, electricity concessions for Bowater Mersey mill

The Nova Scotia government introduced legislation on Dec. 6 to implement a $50-million aid package for the Bowater Mersey newsprint mill in Brooklyn, N.S. This is the latest in a series of concessions by interested parties to keep the mill in…

The Nova Scotia government introduced legislation on Dec. 6 to implement a $50-million aid package for the Bowater Mersey newsprint mill in Brooklyn, N.S. This is the latest in a series of concessions by interested parties to keep the mill in operation, following threats of closure from owner Resolute Forest Products.

The government assistance follows an agreement by the provincial Utility and Review Board to hold off electricity rate increases for three years, and concessions by the union that allow almost half the mill’s unionized workforce to be laid off. In addition, the municipality in which the mill is located approved a 15% property tax reduction.

The Bowater Mersey Investment (2011) Act will give the provincial government legal authority to enact a multi-year agreement that includes a capital investment, land acquisition, and worker skills training. According to the Daily Business Buzz on Dec. 6, the province agreed to give a $25-million forgivable loan provided Resolute keeps the two paper machines operating and makes efficiency improvements and upgrades to its power-producing plant. An additional $1.5 million would go toward training workers.

The province has also agreed to spend $23.75 million to buy woodland from the company.

The Chronicle Herald newspaper reported Nov. 29 that both Bowater Mersey and the closed NewPage Port Hawkesbury mill will be granted relief from a proposed electricity rate increase. The provincial Utility and Review Board granted both companies a discount on electricity rate for three years. The board approved a load retention tariff of 6.02 cents per kilowatt hour next year, increasing in steps to 6.78 cents per kilowatt hour in 2014.

NewPage and Bowater Mersey now pay 6.22 cents per kilowatt hour as a general rate and without the load retention were facing an 11.9 per cent hike next year, plus fuel costs, says the Herald.