Action on Forestry

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Bowater Mersey Pulp and Paper Mill

Friday, Dec. 2, 2011
REMARKS - Premier Darrell Dexter

Good afternoon and thank you for coming

Thank you Vicki.

It is good to be back in Queens Co.

As many of you know, I am from here.

I worked at the Bowater mill many years ago.

I personally know many of the men and women working at the mill now and their families.

And I know how much this mill means to the people of this area.

The residents of Queens County have gone through a lot these past few weeks.

The threat of permanent closure of the mill…and the terrible fire at White Point are events that no community should ever have to face.

When these events occurred, I said I would stand behind the community and we would work together to overcome these significant challenges.

And today, I am proud that the province is doing just that.

Let me be honest, it has not always been easy.

It has been a long road to get to this day.

Many people have made significant sacrifices.

The employees of the mill were forced to make one of the toughest decisions of their lives just a few weeks ago.

I want those employees and their families to know that the province appreciates how difficult a decision this was for them.

It's never easy to see workers give up their jobs to keep a company in business.

They put the good of the community and the future of the Mill above all else. I am pleased to say that their efforts were not in vain.

More than 2,000 families in Liverpool and surrounding communities depend on the mill for their livelihood and want to see it succeed in the future.

It was just over a month ago when I came to Liverpool to meet with company and union officials and members of the community to help identify solutions that would keep the Bowater mill operating here in Queens County for years to come.

I said at that time that the province would do everything within reason to make that happen.

And I stand behind that commitment today.

The Province’s goal throughout discussions with Bowater Mersey was clear:

To find a way to keep the mill in operation through energy and productivity improvements, and to put in motion innovative ways to maintain sustainability and competitiveness in the long term.

The Province has been working around the clock for months with Resolute Forest Products, the owners of Bowater Mersey, to come to an agreement that would ensure a strong future for the mill here in Queens County.

I am pleased that the province has reached a multi-year agreement with Bowater Mersey that will ensure the pulp and paper mill in Liverpool produces newsprint into the future.

The agreement capitalizes on opportunities for the mill to be more productive, efficient and competitive, maintaining approximately 2,000 direct and indirect jobs and supporting the economic well-being of the South Shore and surrounding communities.

Today’s agreement includes:

$25 million for a capital loan to invest in projects to improve energy consumption, efficiencies and the overall competitiveness of the pulp and paper mill;

$1.5 million for workforce re-training opportunities and;

$ 23.75 million for land purchases.

Through the capital loan of 25 million dollars, the company will invest in overhauling its paper production process and will boost the amount of green power generated at its Brooklyn power facility.

The loan will be provided through the Nova Scotia Jobs Fund, and will be secured by lands held by the company.

The Province will purchase 25,000 acres of land for $23.75 million from the mill.

The high value lands will be announced in the months ahead and will help the province reach its goal of protecting 12% of the total land mass of the province by 2015.

Bowater will use the money from the sale of the lands to invest in the long-term sustainability of their pulp and paper operations.

The company will also permit public access to some certain company lands as requested by the Province.

In addition, the province will have the opportunity over the next 5 years to purchase up to an additional 50,000 acres from the mill, if it chooses to do so.

The mill will be leaner and more efficient because of the changes that will take place over the next few months and years. It will become a more modern and sustainable operation.

This will require workers to be re-trained in new operations and processes.

The province is investing $1.5 million in training through the province’s Productivity Improvement Program that will help workers upgrade their skills and be cross-trained on different equipment.

This investment will ensure the workers at the mill are able to succeed and thrive in their new work environment.

I said a few weeks ago that it would not be acceptable to anyone in Nova Scotia to just hand over taxpayers dollars to see the mill operate for another 6 or 8 months.

The solution to keep the mill operating had to be innovative and it had to ensure long term sustainability of the mill.

This agreement does just that.

The agreement is a smart and strategic investment that is helping to secure 2000 jobs in rural Nova Scotia.

Not only will the province invest in capital projects at Bowater, land and retraining, it will work closely with the mill to identify even more innovative solutions that will see the mill thrive.

In particular, efforts are going to be focused on: commercialization, research and development opportunities, and the production and use of innovative paper products.

In return, the mill will continue to invest in other capital projects at the mill that will increases efficiency, productivity and competitiveness.

Bowater has also agreed to look at dredging Liverpool harbour, an important investment that will help lower future transportation costs for the mill

I want to thank Bowater and Mr. Garneau for their support and commitment to the mill in Nova Scotia.

But, we would not be standing here today if it was not for the efforts of many:

Mayor Leefe and the municipality of Queens

The Port of Halifax

Nova Scotia Power

And, most importantly the workers of the mill.

All these groups have made significant sacrifices to get here today.

I want to thank all those groups for recognizing the significance and importance of this pulp and paper mill to the province.

I also want to thank MLA Vicki Conrad who has been a tremendous support to the community and to the government these past few weeks.

I can’t underestimate the importance of the mill to the economic future of the South Shore and to the entire province.

If it closed permanently, it would be a major blow not only to the workers, families and communities of the area, but also to the province’s economy.

The Department of Finance estimates that without this mill and its suppliers contributing to the economy, Nova Scotia's GDP could be almost $300 million lower within 5 years.

There would be significant reductions in exports, employment, personal income and business income. Annual tax revenue losses for the Province could range from $6-10 million.

So, having the mill close its doors was NOT something that the Province was prepared to accept without doing everything within reason to reverse the company's decision.

The pulp and paper mill has been an integral part of the community and the economy of Nova Scotia for over 80 years, and I'm happy to report it will continue to be for years to come.

Thank you to everyone for coming and the support you’ve shown to government and to one another over the last few weeks.

I have always been proud to be from Queens County, but seeing first-hand how you’ve pulled together to make sacrifices for the better of the community,,,makes me even prouder to say I was born and raised here.

Today’s announcement was only possible because of the people of Queens County.

Thank you.

House of Assembly Debates and Proceedings

Wednesday, Nov. 2, 2011
Statement by the Hon. Darrell Dexter
Re: Status of AbitibiBowater, Liverpool

Thank you for the opportunity to make a statement. I would like to begin by saying to my colleagues, the Leader of the Official Opposition, and the Leader of the Progressive Conservative Party that I would have liked to have had a statement in their hands before, but as you will understand, this concerns a matter that has actually been developing over the last few hours. As such, I have just returned from Liverpool, in Queens County, after meeting with the representatives of the union, local management, suppliers, sawmill operators, and local municipalities, and I felt it was necessary for me to be in a position to report to the House of Assembly at the earliest opportunity so that you would be as well informed as possible.

I'll provide a little bit of background if you'll grant me the time. The reality is, a few months ago Abitibi officials met in my office with members of my office staff and me to inform us that they had made a decision to close the Bowater operations in Queens County. I indicated to them at that time that I felt this was an unacceptable position for the company to take; that this mill had been in operation, as I know very well, through three generations of workers; that it had provided a profit for successive companies over those years; that it had a good workforce, a good supply of fiber, a good asset base; and that there surely must be a way for that mill to continue to operate.

They indicated at that time that they didn't believe that was the case but they were prepared to listen to us. As you would know, as members know, a few months ago we set up a mills committee across the various departments of government to deal with what was happening in NewPage, and of course we turned our attention not just to NewPage but to the other mills in the province because they are all important to the communities in which they are located.

Over the last number of months we have worked with the Bowater management team, both local and international, and they have come to the conclusion now that there is a way forward for that mill. It will not be easy. It is not in the same position as the NewPage Port Hawkesbury mill. Obviously, that one went through a bankruptcy which puts it in a different category - it has an asset that needs to be sold.

This one is about a company continuing to operate an asset in the face of a number of difficulties. One is that the world price per ton of pulp and paper is declining. The second is that the demand for pulp and paper is declining in almost every market around the world; there are some very limited exceptions to that. Because of the downturn in the U.S. market with respect to lumber, the access to fibre for the paper mill has actually gone up by something like 30 per cent since 2008. So they're dealing with the increased fibre costs, increased electricity costs, labour costs that are not consistent with what they're getting in other places. All of these things completely through the supply chain are creating a problem for the mill.

We have said and we have pledged our commitment to the mill but I think more importantly to the community, to the people who work in that mill, to the families who rely on it, to do everything in our power to try to ensure that we take costs out of the supply chain from one end to the other in order to ensure that that mill, in fact, has a future. They have now said they are willing to consider that, but that if they are going to make another decision other than closure, that's going to have to be done soon. So this morning, as I have indicated, I met with all of the stakeholders. I indicated that we needed to go through this planning process and we needed to do it as quickly as possible in order to be able to get a new plan before the management of the company - and remember, this is not the local management - to make the decision to continue. In that regard, I have extended to all the stakeholders an offer to co-operate; whether it is the Port of Halifax with respect to shipping costs or whether it is the sawmills. As you may know, they also own Brooklyn Energy, which is an additional piece to this.

Throughout the supply chain we're asking for their co-operation as we are with the representatives of the employees who are there. The employees there have already taken a 22 per cent cut in their wages. So we're asking a lot for them to go back and take what is essentially another $17 per ton out of labour costs from $97 to $80. We're asking suppliers to move the costs from $537 a ton down to $480 a ton. This is in order to be competitive.

What I wanted the members of the Legislature to know is that this is a very difficult day for the people of Queens County; indeed, right along the South Shore, this would have an extraordinary impact. It's a difficult day but there is a road forward. As with the NewPage Port Hawkesbury mill, I'm sure that all of you would want to co-operate in assisting us to get to where we have to be. We've made a commitment to do that. We're going to support that community. We're going to support their families. We're going to support the people who work there because we're all in this boat. Thank you for the opportunity to make this statement, Mr. Speaker.

Remarks by Premier Darrell Dexter

Announcement of Woodlands Initiative
Port Hawkesbury Civic Centre
Friday, Sept. 9, 2011, 11:30 a.m.

Thank you Duff.

Good morning and thank you for being here.

It is a difficult time in the Strait.

Contractors and truckers face unpaid bills that threaten their future.

Employees and former employees of the NewPage plant face unemployment and uncertainty around their pension plans.

The families of a thousand workers do not know what the future holds.

Since August 22, the eyes of the people of this province have been on Port Hawkesbury.

Through all of this uncertainty and unfairness Nova Scotians have watched as you maintained a focus and determination to ensure that this mill has a future.

Immediately following NewPage's announcement, I came to Port Hawkesbury to make it clear to all the workers and their families, that they had my commitment and the commitment of this province to work morning, noon and night with a focus on the future.

You know... I know... and the industry knows that this plant is one of the most modern and efficient in the world.

The workforce, including the contractors, truckers and others, is among the best.

Because of this, there are a number of groups interested in buying this plant.

The provincial team has already been talking to potential buyers.

Two weeks ago, I came here and said I would work with staff to put together a plan that would keep the woodlands operation, the vital supply chain to this plant, operating.

That is critical to ensuring a quick re-sale.

By keeping the supply chain operating, we can say to interested buyers: here we have an efficient workforce... here we have one of the best mills in the world... and here in Port Hawkesbury we have a mill in hot idle with a supply chain intact.

It's ready to go without needless delay.

As Premier, the best thing I can do for workers, families and contractors is to ensure this mill finds a good new owner.

We have other challenges around this problem we face.

We need to deal with those, and we will deal with them.

In 14 days we've prepared a plan to address the first problem — keeping the woodlands supply chain working to ensure this plant is re-sale ready.

We must keep skilled woods workers in operation.

The plan includes seven actions to help do that:

Action 1:

The province is expanding its silviculture program for 2011 and 2012.

We will maintain the planned $2.5 million in silviculture programs for Crown land and private land expand it by an additional half million dollars.

We will expand it by an additional half million dollars on Crown land and an additional $1 million for silviculture on private lands.

The maintenance and expansion of this program will provide work for the existing silviculture contractors and crews — approximately 300 people — as well as work for contractors and crew members who will transition to silviculture work.

It is an investment in sustainable forest management and in your future wood supply.

Action 2:

The province will stockpile wood for future use in the Strait, to keep harvesters and truckers working.

Much of this work will involve creating a stockpile of fuel for the Biomass Cogen facility.

That project requires a supply of dried fuel in order to proceed on schedule.

We will keep harvesters and truckers working to build that supply.

Government officials are negotiating with NSPI on the exact wood storage requirements.

The future success of the biomass facility will be important for any potential buyer looking to take over the mill.

In order to keep this mill re-sale ready, it will also need a ready supply of pulpwood to ensure it is more attractive to a potential customer.

The province will support the wood storage program and we expect to be able to recoup wood storage costs when the product is sold.

Action 3:

The province will ensure crown forest roads are maintained in the NewPage Port Hawkesbury harvest area.

Normally all crown licensees such as NewPage are responsible to fund forest road construction and maintenance.

The province will invest $125,000 per month for the next few months to keep the usual number of road contractors working to maintain NewPage's road infrastructure.

This investment will also ensure that when a new buyer is secured, the forest roads are in good, working order.

Action 4:

The success of this plan hinges on the core team of NewPage Port Hawkesbury staff who know the woodland operations of this mill and can keep it going.

The province will ensure the mill is able to retain a core team of approximately 20 woodlands staff with the knowledge and ability to facilitate work and training and oversee the appropriate use of Crown land.

Action 5:

Most contractors and some truckers are self-employed.

Many have major investments in high-priced equipment and face a crunch in the short-term due to the shutdown.

The province will amend the Credit Union Small Business Loan Program in a way that means it better addresses financing concerns for contractors here and other small businesses.

The existing loan program, administered by the Department of Economic and Rural Development and the Credit Unions, provides a loan guarantee from the province of up to 75 per cent of the loan.

Government will increase the minimum loan amount and the amortization period and offer an initial guarantee of 90 per cent, for qualifying businesses.

The province is working with the Nova Scotia Co-operative Council to make the necessary amendments to the program and will have final details very shortly.

Action 6:

In order for many woods workers to take on the silviculture work available in this plan, they will need training.

The province will invest up to $3.5 million and will work with the NewPage Port Hawkesbury's core woodlands team to develop specialized training programs for self-employed workers that will focus on silviculture, sustainable forestry practices, productivity improvements, and efficiency of forestry operations.

By investing in customized training programs, combined with practical work experience, the province is helping industry meet the 50 per cent clearcutting target by 2015, while keeping the woodlands workforce operational.

Finally, Action 7:

The province is engaging a world market specialist to complete a comprehensive market study for both newsprint and the high-gloss paper, which the Port Hawkesbury plant has specialized equipment for.

This is important because I want the province and any potential new buyer to understand the global markets and identify opportunities to make sure this mill viable into the future.

The seven-point action plan I just outlined will maintain about 500 jobs and is a total investment of approximately $15million.

It is designed to get us through the next three months as we prepare for the re-sale of this plant.

You are determined to keep this mill ready for re-sale... I am determined to keep this mill ready for re-sale.

That is just what we are going to do.

I want to thank Duff Montgomerie, his staff at DNR, and all the Deputy Ministers and their staff who worked around the clock since August 24 to help develop this action plan.

I know there are difficult days ahead for the people of the Strait area.

This plan addresses the most significant problem in front of us, keeping this mill ready for re-sale.

But it does not address all our challenges.

As an important example, the province is urging NewPage, the monitor and contractors to resolve the issues of monies outstanding.

My staff and I will continue working quickly to address other issues.

While the next few weeks and months will not be easy for many families from this region, I want them to know that the province has their best interests at heart in every decision made regarding the future of this mill.

Over the past few days, I've been asked many questions about whether or not a buyer would come into Port Hawkesbury and simply buy the assets in the mill and ship them elsewhere in the world.

What I said at that time and what I will say again here today is that.the province is as determined as the people of the Strait area to ensure any potential buyers keep this mill open right here in Port Hawkesbury.

I want to thank you all for being here today and for the support the province has received from all our municipal and federal colleagues, union leadership, members of the Strait Area Chamber of Commerce and the people of the Strait region.

I want to say to the people of the Strait area that your Province is behind you.

I am very optimistic about the future of the mill in Port Hawkesbury and I look forward to updating you on the implementation and success of the seven-point action plan in the days ahead.

Thank you.