Nova Scotia premier has no regrets giving millions to mill, despite job cuts

HALIFAX – Nova Scotia’s premier said Friday he doesn’t regret providing millions of dollars in public money to support an idled Cape Breton paper mill, even as its prospective buyer is proposing to lay off more than 300 workers at the operation.

Darrell Dexter said the government knew there would be no guarantees when it offered up to $30 million to support forestry operations and keep the NewPage Port Hawkesbury mill in a so-called hot-idle state so it could be quickly restarted.

Dexter said the alternative would have resulted in the mill’s permanent closure and likely a move to the U.S.

“Nobody’s going to buy something to run a loss and we obviously understand that,” said Dexter. “The investment we made is to preserve the asset because the alternative is pretty dire.”

He said the tough choices being asked of unionized workers at the mill reflect the struggles facing North America’s forestry industry.

The employees are now considering a proposal from Pacific West Commercial Corp. that would involve rehiring 229 of their 550-member workforce. A company spokesman said the workers have until Thursday to decide whether to accept the offer.

Dexter declined to say whether he believed the workers should accept the company’s proposal, saying they would have to exercise their own judgement.

“They know what’s at stake and are trying to figure out how it’s going to affect their futures … their families and their communities.”

According to the 10-year contract, 80 per cent of the hiring would be based on seniority while the company reserves the right to use its own discretion with the remaining 20 per cent.

The pension plan at the operation would also be discontinued and replaced with a new defined contribution plan, with matching contributions from the company of five per cent of wages.

Dexter said the province didn’t consider topping up the pension as part of any aid package because of the precedent it would set.

“There are pension plans across the province that have been in difficulty and some that have failed,” he said. “That liability cannot be transferred to the taxpayers.”

Liberal Leader Stephen McNeil said the NewPage proposal shows the government hasn’t learned from its past experience after it came up with a settlement to keep the Bowater Mersey paper mill operating on the province’s South Shore.

Under a five-year deal with owner Resolute Forest Products (TSX:ABH), unionized workers agreed to concessions that would see 110 full- and part-time jobs cut.

The province also agreed as part of the deal to provide the company with a $25-million forgivable loan along with $1.5 million for worker training, while also giving $23.75 million to purchase woodland from the company.

McNeil said the province should have attached conditions to its NewPage funding package that would have protected more workers.

“There has to be a better way than to be pitting neighbour against neighbour to decide who keeps their job and who doesn’t,” said McNeil.

A union meeting will be held Saturday as NewPage workers consider what to do with the offer.

Pacific West Commercial spokesman Marc Dube said the company believes its Thursday deadline is fair given that purchase negotiations have been ongoing for months and it would take some time to restart the mill.

He added that the company’s application before the provincial regulator to lower its power rates would likely take another three months to resolve.

“This all has to come together before that goes in, that’s why it is so critical,” Dube said.

He said the contract offer was fair because the workers who would be hired would be getting the same wages and a “competitive” benefits package that included profit-sharing.

Port Hawkesbury Mayor Billy Joe MacLean said he hopes both sides can come to an agreement over the coming days.

“There’s a really deep worry and concern by business people, by the families of union members, by the administration and it goes on for a hundred miles around the Strait,” MacLean said.