Nova Scotia announces $124.5 million in incentives for NewPage paper mill

HALIFAX – The government of Nova Scotia has announced a $124.5 million funding package in efforts to help resume operations at the idle NewPage Port Hawkesbury paper mill this fall.

Premier Darrell Dexter made the announcement Monday, saying he was certain the prospective buyer of the mill can turn the facility’s fortunes around.

“We are confident that Pacific West is well-positioned to be the most competitive and best supercalender paper mill in the world,” Dexter told a news conference in Port Hawkesbury.

“The mill has the most modern machine in North America and we are helping position it to take advantage of this and become a leader in producing supercalendered paper.”

Under the deal, the provincial government is offering Pacific West Commercial financial incentives including $66.5 million in loans, $26.5 million of which could be forgiven if the Vancouver company meets certain criteria.

The government has also agreed to buy about 20,840 hectares of land from NewPage Port Hawkesbury for $20 million. That money would go to the mill’s creditors.

It would also give Pacific West Commercial $3.8 million annually for 10 years to support forest land management and sustainable harvesting.

Dexter’s announcement came moments after Nova Scotia’s Utility and Review Board approved Pacific West Commercial’s application for a special power rate deal with Nova Scotia Power.

Under the arrangement, the private utility company would receive tax-free divided payments for electricity instead of a regular tariff. The deal would last until the end of 2019.

The board’s decision still requires approval from the Canada Revenue Agency.

Pacific West Commercial has said the deal is critical in its efforts to reopen the mill, which it is planning to buy for $33 million.

The mill shut down last September, laying off some 600 employees and affecting another 400 forestry contractors. It opened in 1962.