Port Hawkesbury mill to re-open

Premier Darrell Dexter announced late on September 22nd that the
province has negotiated a new agreement for Nova Scotia taxpayers to
reopen the mill and keep hundreds of people working in the Strait
region.

“I want to thank the people of the Strait. Their hard
work, sacrifice and determination over the past year has paid off,” said
Premier Dexter. “Even after it appeared there was no hope, both parties
worked through the night and I’m very pleased to say we now have a new
agreement that is a better deal for Nova Scotians.

“The bottom
line is that under this new agreement, the total amount the province
will contribute to support the workers, families and businesses
throughout the Strait should be repaid in as early as 12 years and the
province will have earned about $150 million in tax revenue.”

In
August the premier announced a number of investments to support the
reopening of the mill and protect the 1,400 jobs that rely on its
operation. The province has also invested $36.8 million to date to keep
the mill in hot idle and set up the Forestry Infrastructure Fund to keep
people working in the forestry industry and produce product, a
necessary part of keeping our forests healthy and sustainable.

Under this new agreement, all of those investments will be recovered in full the premier said.

“This government has worked for a year now to restart that mill,” said
Premier Dexter. “We didn’t do this because it was popular – we did it
because it was the right thing to do.”

The new arrangement will
significantly increase the annual share of profits paid to the province
and it will ensure a significant amount of the tax savings generated by
Pacific West Commercial Corporation (PWCC) in other provinces will be
shared with Nova Scotia.

In addition to that, as a result of the
Canada Revenue Agency ruling earlier this month the province will
receive millions in additional revenue.

Much of the original
agreement hinged on PWCC receiving a positive ruling from the Canada
Revenue Agency on its taxes. When that did not happen, the province
continued negotiating with the company to find a way forward within the
financial framework already announced.

At the same time, the
Nova Scotia Utility and Review Board had provided until 4:15 p.m. on
Sept. 21, for a revised rate application filing by PWCC. The board made
clear that, provided an application was received by this deadline and
that ratepayers would be no worse off under the revised filing, it would
be in a position to provide a revised order on or before the
court-imposed closing deadline of Sept. 28.

Despite the parties’ best efforts, that deadline could not be met and both sides walked away from the table last night.

“Every option identified at that point exposed Nova Scotia taxpayers to
too much risk and the province was not prepared to accept that,”
Premier Dexter said. “However, later in the night there were further
discussions. We worked hard and were able to come up with something that
further benefits taxpayers and will make the mill more competitive.”

Pacific
West and the province have agreed that all elements of the province’s
previously announced support remain the same, with the following
exceptions:

• the previously repayable loan of $40 million will now be earnable by
  the company, subject to verification of an equivalent amount of taxes
  being paid by Nova Scotia Power as a result of energy purchases under
  the proposed new tariff. The province will forgive no more than what is
  paid to the province in taxes, to a cap of $40 million, over a maximum
  of 12 years
• profit-sharing increases from a cap of $9 million, to a cap of $24 million
• Pacific West will incorporate other mills and related assets into
  the mill (Port Hawkesbury Paper). This will improve its competitive
  position through disposition of the accumulated tax losses
• in recognition of the above provincial investments, the province
  will share in the benefits of the use of the accumulated tax losses
  available through Port Hawkesbury Paper in connection with the other
  assets. For every dollar of accumulated tax losses used by the company,
  the province will be paid 32 cents, and 18 cents will be directly
  reinvested in the mill to improve its competitive position, subject to
  review of the proposed investments by the province.

“This is the outcome people have been working towards for months,” said
Premier Dexter. “Employees will be able to continue working to support
their families, businesses will benefit from those families staying in
the community, the province gets a better deal for taxpayers and the
company is able to achieve the competitive position it needs to operate
the mill profitably in the long run. It’s a win-win for everyone
involved.”